usually i prefer to “trade” stocks based on technical analysis (TA) but sometimes, i do take a look at reits that pay yield >10% to put my money to work for me in the long run.  last year, i was not looking hard to buy reits in SGX since the yield then was pathetic……but with stock prices crumbling down, maybe it’s time to take a closer look at some of them.  in fact, one would notice over the past few days that some reits no longer drop as fast as stocks since their yield has reached attractive levels.

back to Babcock, i think this stock may be worth a look due to:
1.the management has said that they intend to pay 3c dividend in 2H08, which means the yield is >10% based on that alone

2.NAV is S$0.70.  So babcock is trading at almost 60% discount to NAV…..this may be one of the highest discount to NAV for REITS listed in SGX

3.babcock has been writing down one of its investments in a US listed company called “Babcock&Brown Air Limited” as the stock price of the company in US has been dropping inline with the overall markets globally.  But interestingly, this write off is merely an accounting treatment and does not affect the cashflow of the singapore listed babcock&brown…..which explains why babcock says it will pay out 3c dividend in 2H08.

4. the stock price of the US listed company has rebounded from a low of US$8 in middle of july to a recent high of about US$12, a rebound of almost 50%. this means that in 3Q08, there is unlikely to be any write off due to this investment.

having said all these, one must wonder why then has the stock price not recovered much from the all time low of S$0.26?

i do not have the answer to this one……maybe there could be more write off due to other investments……or maybe the market has not realized yet the worst maybe over for babcock

anyway, i plan to put in a few dollars in this one and am prepared to lose my penny if i am wrong with my personal analysis should the worst happens for babcock ie more write offs and reduced dividend.

but if i am right, then the reward is worth the risk i am taking since the potential yield could be as high as 20% (assuming oil prices have peaked and they are able to pay 3c dividend every six months)……you need to do your own homework and decide yourself if you like this badcock…..erh i mean babcock.

rooney

p/s : this is not an inducement to buy, please do your own homework

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As i look at the closing prices across the board for SGX, especially singapore listed S-chips today, i cannot help but feel glad i manage to follow my TA signals strictly.  Recall 2 days ago i mentioned that there could be a “potential” rebound on the cards based on the closing prices.  But valid entry signals for some of the singapore listed stocks that i like such as ferrochina, sino environment and china XLX will only present themself provided the breakout signals are triggered!

Since the breakout signals were not triggered, it means we just sit back and wait again…… I am determined not to make some of the mistakes that i have made before.  In the past, when i saw stock prices sliding down to levels which i thought look attractive based on fundamental analysis, but even when TA signals look bad, I would try to justify or anticipate that a rebound just have to come since they look so “cheap”.  I have learnt and paid the price few times for these mistakes and realized that “cheap” is a relative term based on FA.  A stock can trade at 25x PE and still go higher when market is hot and vice versa……it can trade at 5x PE and still drop to 2.5x PE when market is cold!!  This is exactly what is happening right now……….for many singapore shares which reported strong earnings only to see the stock prices sliding down further.

I would say market liquidity and sentiment are bigger drivers of stock price movement than corporate earnings.

I am now back to square one again…..because the potential rebound signals that i saw have been invalidated with the sell down today.  I just have to wait patiently for the next signals……..just like Alex Ferguson had to wait patiently before he finally capture Dimitar Berbatov.

happy waiting

rooney

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again, i have shared this point before, i do not trade for the sake of trading but would strive to trade “correctly” ie i have to follow the technical analysis signals or rules as close as possible.

since there are no breakout buy signals……i will not enter any position and will relax for now.

one interesting point i would like to share is that hangseng index has been staging after lunch rebounds quite often lately…..let’s see if that may happen again today around 3pm!

cheer

rooney

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It’s been awhile since i last saw a potential group breakout signals for SGX……and i see them coming today after the singapore share market closed on 2nd september. Some of the singapore stocks that i like include :

based on MACD technical indicator signal

sino-environment - breakout trigger at 1.18

ferrochina - breakout trigger at 0.92

chinaxlx - breakou trigger at 0.555

i would look to long when prices go 1 bid above the breakout trigger and set cut loss at 2 bids below the breakout trigger

the good news is that apart from this 3 stocks showing potential, many other stocks also showing rebound signals which i would consider as “group” breakout potential signals…..enough to get me excited

happy hunting

cheers

rooney

sino-enviroment

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Recently, I traded some stocks ahead of the results season in the Singapore stock exchange. The net outcome was Breakeven as I have entered the first batch of positions prematurely BEFORE the trigger breakout signals present themself and had to cut loss as the stock price retreated.  The circumstance surrounding the entry decisions was that the market has been down a few days and then regional markets rebounded in the morning, so i naturally ASSUME that the stocks i am monitoring would also follow suit.  Actually there is nothing wrong with this assumption as long as i am aware of the potential risk and prepared to cut loss if i am proven wrong……which was the case.

During the subsequent sell down of stocks in singapore stock exchange, i was more determined to wait out for the buy signals to be triggered. This time, I would be rewarded with some trading gains…..some of my recent trades were posted here:  http://mojostock.com/forums/forumdisplay.php?f=33

And when the results seasons come to an end for the singapore share market, I have closed all my positions once the results season “window” period is over. I ended this round just about breakeven after closing all positions.

As i look at the recent trades, the bad ones were the ones which i entered “in anticipation” of a breakout.

So last Friday as i did my homework, the chart for Ferrochina looked “tempting” again……but this time round, i have decided NOT to anticipate the breakout even though US and Japan stock markets had performed strongly prior to the opening of the singapore stock market.  As i mentioned last week, the breakout trigger for Ferrochina is 1.03……and this morning the highest done was 1.02.  Had I tried to anticipate the breakout and entered prematurely, it would have ended up being a bad trade as it has fallen back to 0.98….and in the process triggered the cut loss point.

This incident reminded me the importance of being disciplined and having patience to wait for the fish to come around……

rooney

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Singapore listed stock Ferrochina has been sold down heavily despite posting a positive set of financial results for 2Q08 on 14 August.  Subsequently, stock price fell from 1.29 to a low of 0.925….down a whopping 28.3% within 5 trading days.

I usually do not use fundamental analysis (FA) to trade stocks but would  prefer to combine FA with TA (technical analysis).

Some of the technical indicators that i am using such as CCI, MACD, W%, RSI are telling me to be alert to a potential rebound. I would be looking at 1.02 as a near term resistance. It has been tested twice but failed to close above this level.  To me, a close above 1.02 will indicate potential more upside since this near term resistance is taken out.

One may ask how can one knows if 1.02 can be successfully take out?

The answer is…..I will never know for sure, so I will usually take a small position when 1.03 is triggered and wait till 430pm and see if price is still above 1.02 then may add more as market moves closer to the end of the day.

With Dow Jones powering up more than 100 points tonite, there is a good chance that 1.03 may be triggered……no point guessing though I shall just sit back and wait.

happy trading

rooney

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Now that results season is over for singapore listed companies, what should we expect next for the singapore stock market?

STI - if u look at the Medium term trend, it’s is still obviously down!

exponential moving averages (EMA) - 50days EMA is well below 100 days EMA and 200EMA, so any upward rebound will continue to face selling pressure

parabolic SAR - sti is trading way below the parabolic SAR indicator, meaning that the negative sentiment is still very strong, any near term rebound is not likely to be strong enough to push this indicator into positive zone. at the current moment, sti needs to hit 2900 in order to turn parabolic SAR into positive……..which is extremely unlikely.

based on my estimates that sti needs to rise about 5.45% or 150 points in order to push parabolic SAR into positive zone, it means that it will take at least 5 or 10 more days before we may expect to see a stronger rebound.

when i pull out the charts for MANY individual stocks, i can also see that most of their parabolic SAR indicators are deep in negative zone……this give me the same impression that they will need a very strong rebound to push their respective SAR indicators into positive zone……and again, it means that their stock price expects to see a lot of selling pressure when it rebounds and it will take another 5 to 10 days at least before we can expect to see a stronger rebound.

trade with care

rooney

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CIMB Ride The Dragon Conference 26 july 08 for singapore listed companies

presenting companies
1. China sunshine chemical
2. China zaino
3. China sports
4. Yongmao holdings
5. China taisan

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Hong Kong dry-bulk shipping line company Maritime Capital Shipping has
decided not to proceed with an initial public offering (IPO) in the Singapore Stock Exchange due to weak sentiment for the Singapore stock market in recent weeks.

A report quoted the CEO of Maritime Capital Mr. Mark Harris saying “The performance of the global equity markets has deteriorated sharply in the last few days and equity markets have closed for IPOs, regardless of the underlying fundamentals of the company.” Mr. Harris did not say when or whether the company might reconsider listing plans.

After witnessing the “failure” of some of the recent IPOs in Singapore share market, most investors would find it hard to jump into another IPO. Most recent Singapore IPOs have tanked on day one of listing and are still trading below their respective IPO prices. The last count is that 15 of the 18 new companies whose shares are listed in the Singapore stock exchange this year are now trading below their offer prices.

After the recent sell off in the broad market, some recent IPOs are trading at 3-4 times FY08 earnings…….it’s no wonder new IPOs are finding hard convincing investors to subscribe to them at 4-5 times FY07 earnings.

If you are value investors, do some homework yourself on some of the recent IPOs where stock prices have fallen to 3-4times FY08 earnings. Monitor their 2Q08 results and track if these companies are on track to meet consensus estimates or the forecast FY08 earnings given during IPO. If they are on track, then the next question is WHEN is the right time to accumulate …….this is when Mr. Chart’s technical indicators and analysis come into play

Happy Hunting!

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1. What is Contracts for Difference (CFD)?
A CFD is an agreement between 2 parties to settle the difference between the opening price and closing price of the
contract multiplied by the number of shares specified. It is therefore a unique trading instrument that allows the
customers to trade in stocks with the key features of leveraging and short-selling.

2. Key Features of Phillip CFD?
These are the advantages of using Phillip Stock CFD:
_ Portfolio Diversification
Besides SGX, HKSE and KLSE, customers now have the added advantage of diversifying their stocks and CFD portfolio
with selected companies listed on the NYSE and NASDAQ. With lesser initial capital outlay (20%), customers can now
effectively perform portfolio diversification.

_ Convenience to Short Sell*
A CFD allows you to take a position on a stock without needing to buy and sell the shares themselves. Therefore, CFD
investors can take short position, and not be limited to the T+3 days contra period or be tired out by the
administrative hassles that accompany SBL trading.

* Share Borrowing and Lending(SBL) facility allows you to short the market by borrowing shares, the accompanying administrative hassles often
results in investors missing out on the ‘right’ price to sell.

_ 5 Times Trading Power, Increased Leverage
Phillip CFD will enable you to leverage up to 5 times the capital, allowing clients to pay only a fraction of the
underlying capital required.

_ 30 Calendar Days “CONTRA”
Each CFD contract has an expiry date of 30 calendar days. Investors can choose to close out anytimebefore
expiration. If contracts are not closed out within 30 calendar days, they will be automatically renewed at the end of
the 30th day.

_ Sophisticated Trading Strategies
You will have the added ability to protect your existing share portfolio against adverse market conditions by utilizing
the Phillip CFDs to hedge your exposure, via strategies such as pair trading and spread trading.

_ Smart STOP Order§
Increase your chances of winning and minimize losses with the use of the STOP order type. Our Stock CFD (US) now
has a system which allows for higher entries and cut loss trades. Simply by the differentiation of the mid-price and
the price input, the system will be able to identify if a customer is putting in a STOP order.

§STOP order is currently applicable for US markets only.

** Customers are advised to exercise caution when executing orders at current spread especially during volatile conditions.

_ 1.5%p.a. Interest Receivable for Short-Selling
Customers using Phillip US Stock CFD to short-sell will receive interest on their overnight short positions.

3. Corporate Actions

Dividends
A holder of long Phillip CFD on the quoted shares* will receive a credit adjustment** in the account, where the adjustment is equivalent to the net dividend payment due on the underlying shares. Conversely, a holder of short
Phillip CFD will incur a debit adjustment** where it is equivalent to the gross dividend.
*Shares refers to companies being listed on the respective exchanges
**Dividends adjustment will be in the respective exchanges’ currencies.

Bonus, Stock Splits, and Reverse Splits
Quantity and price adjustment will be made to reflect the market equivalent.
Note: Notwithstanding the foregoing, PSPL reserves the right to close all open positions relating to the underlying security before the ex-date for
any corporate action not mentioned above.

In the event there is a combination of Corporate Actions (“CA-Cum All”), where it includes corporate actions other than above mentioned,
clients might not be able to enjoy the entitlement and may be required to close off all open positions before the ex-date.

Eg. ABC stock announces $0.05 dividend per share (which Phillip CFD originally caters for) & 1 for 10 rights issue at $0.60 (which Phillip CFD
originally does not cater for). Ex-date for both Corporate Actions is on 1st October 07.

Clients who are holding the above position would not be entitled to both the rights & dividends and would have to liquidate their positions before
ex-date.

4. Settlement Currency
All Phillip CFD contracts would be settled in the traded currencies. Client’s MYR ledger is not allowed to go into deficit. Should there be a deficit, MYR ledger will be forced converted into SGD. For USD and HKD, there will be NO
AUTO CONVERSION for USD and HKD should there be any margin deficit in these 2 currencies. Should there be any margin deficit in the respective ledger, clients should submit conversion request to avoid margin debit interest.

Exchanges - Settlement Currency
SGX - Singapore Dollars
KLSE / HKSE / US - Traded Currency

Counters Available
For the latest list of counters Phillip CFD issues, please visit our CFD website @ www.phillipcfd.com to download the counter list.

Placing Orders
Phillip CFD orders can be placed in a similar way as placing an ordinary share order. They can be placed through
POEMS online or through your Trading Representatives.

Mini CFDs – Trade BLUE CHIPS at half a lot
You may place long or short CFD order of 500 shares instead of 1 board lot for the following SGX Blue Chips.
Mini CFDs counters
1 City Dev 6 Keppel Corp
2 DBS 7 SGX
3 F&N 8 SIA
4 Great Eastern 9 UOB
5 Jardine C&C 10 Venture

Minimum Deposit
Investors are required to put up an initial deposit of S$3,000 before any trades can be initiated. Thereafter, the
maintenance margin will be 20% of your portfolio market value, marked to market daily.

Withdrawal
Margin Excess from cash deposit may be withdrawn.

Mode of Payment
_ Cash payment for your CFD trading account can be made at the Head Office’s cashier counter.
_ EPS (Electronic Payment for Shares): Please choose “Lump Sum” payment and initiate payments before 9 pm to
ensure that your CFD ledger is credited punctually before the next market day. Kindly inform your dealer/remisier that the EPS is meant for your CFD trading account.
_ Cheque should be crossed and made payable to “Phillip Securities Pte Ltd”. Please state your trading account number, name and contact number on the back of the cheque, and stating clearly that this payment is meant for
Phillip CFD.
_ Existing Phillip clients can initiate transfer from your stock & shares trading account to CFD account via online or through your dealer / remisier.
_ Telegraphic Transfer (TT): Please state your trading account number and name along with the telegraphic transfer. Kindly inform your dealer/remisier that the TT amount is meant for your CFD trading account.

Closure of Account
An administrative fee of up to S$1.07 (inclusive of GST) would be levied for account closure with credit balance
of S$1.00 or below.

Fees & Charges
_ Commission‪
Market Commission Minimum Commission
SGX 0.3% for contract value > S$12,000
0.5% for contract value X S$12,000
Above applies to non STI component stocks
*0.1% for Component Stocks (*Promo till 31 Jul 08)
S$22 / US$15 / HK$150
KLSE 0.6% (Settlement Currency in MYR) RM60 (Settlement Currency in MYR)
HKSE §0.35% (§Promo till 30 Jun 08) HK$150
NYSE / NASDAQ 0.25%* US$25*
An additional renewal commission will be applied on the 30th day closing price. GST on commission.
Upon renewal, the new contract value will be the last done price (on T+30) multiplied by the contract quantity.
* Commission will be calculated on per trade basis, no amalgamation will be performed.

Differences between CFD & Traditional Shares (Singapore Market)
CFD Traditional shares
Settlement period _ T+30 calendar days _ T+3 market days
Capital Outlay _ 20% _ 100% on T+3

“Short-sell”function Just a mouse click away Subjected to T+4 buy-in if you
shortsell
without buying
back on same day
Financing charges 5.5% p.a. (Long) N.A
4.0%* or 8.0% p.a. (Short)
(based on 100% of opening
contract value)

Share ownership No Yes
Commission 0.2% or 0.3% or 0.5% 0.28% - 0.5%
*Rates are subjected to change*

SGX clearing
& access fee N.A 0.0475%

Short A Stock in Singapore Stock Market Using CFD For Example

A client is bearish on ZZ (listed on SGX and non-STI component stock) and sells 4,000 shares (2 times leverage) at S$1.40 after borrowing from SBL. Alternatively, the client can deposit the S$2,800 and sell up to S$14,000 worth of CFD contract in counter ZZ at S$1.40.

Scenario 1: Positions are closed 10 days later @ S$1.30

Original Investment Short CFDS$2,800 Short StockS$2,800

Opening contract value (Day 1) S$14,000 S$5,600
Opening commission (incl GST) (S$44.94) (S$16.78)
Clearing & Access fees (incl GST) S$0 (S$2.85)
Borrowing Charge (S$30.68) (S$10.74)
Closing contract value (Day 10) (S$13,000) (S$5,200)
Handling fee (incl GST) S$0 (S$21.94)
Closing Commission (incl GST) (S$41.73) (S$15.58)
Clearing & Access fee (incl GST) S$0 (S$2.64)
Net Gain S$882.65 S$329.47

Scenario 1: Positions are closed 10 days later @ S$1.50 (with a loss)

Original Investment Short CFDS$2,800 Short StockS$2,800
Opening contract value (Day 1) S$14,000 S$5,600
Opening commission (incl GST) (S$44.94) (S$16.78)
Clearing & Access fees (incl GST) S$0 (S$2.85)
Borrowing Charge (S$30.68) (S$10.74)
Closing contract value (Day 10) (S$15,000) (S$6,000)
Handling fee (incl GST) S$0 (S$21.94)
Closing Commission (incl GST) (S$48.15) (S$17.98)
Clearing & Access fee (incl GST) S$0 (S$3.05)
Net Loss (S$1123.77) (S$473.34)

Source : www.phillipcfd.com

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