Keppel REIT: Starts Down Trend!

Keppel REIT broke down from the Rectangle (a consolidation pattern for close to 8 months) and starts down trend. This is not unexpected due to the high gearing ratio which is very sensitive to interest rate hike.

Keppel REIT June10-2015

Base on previous chart pattern, 20D SMA is a reliable resistance when Keppel REIT is on down trend. So, it is a good opportunity to short when there is a dead cat bounce back to 20D SMA resistance.

Learn how to Short Sell Singapore Stocks here.

Keppel REIT Fundamental Data

  • Last Done Price = $1.14
  • NAV = $1.39
  • Price / NAV = 0.82
  • Price / NAV (High) = 1.13
  • Price /NAV (Low) = 0.80
  • Gearing Ratio = 42.4%
  • Distribution Yield = 5.965%

See other Singapore REITs Fundamental Analysis Comparison Table here.

Keppel REIT: Continue to Fall!

Keppel REIT is another REIT with high gearing of more than 40% (43.9%!!). Expect more down side to come when there is interest hike and right issues.

Technically Keppel REIT chart is bearish. Any rebound will be limited by the down trend resistance line and 20D/50D SMA resistance. Also take note that Keppel REIT has just broken the recent low support at $1.17. Expect more down side to come!

Keppel REIT Dec13-2013

 

See other Singapore REIT comparison table here.

 

Is It Time to Invest in Singapore REIT to build up Passive Income?

Debt Ceiling settled (at least for the time being), US Government re-opens, no sign of QE tapering yet, Dow Jones Industrial Index, S&P500, NASDAQ are recording historical high and still on the solid uptrend, Europe is coming out from recession, China and US GDP are doing well again….. so many good news, IS IT A GOOD TIME TO ENTER THE MARKET?

I received many inquiries regarding whether this is the right time to buy Singapore REIT. To tell you the truth: I do NOT know as I am not the fortune teller. No one can predict the direction of the stock market but it is important to understand the global economy and how those events can affect our investment plan and portfolio.

Besides looking at those Singapore REIT Fundamental data like NAV, Distribution Yield, Gearing Ratio, etc .. (See the Comparison Table for Singapore REIT here.), there are a few risks that we need to be aware as far as investing in Singapore REITs are concerned:

  • The hike of interest – The day will DEFINITELY come and the only question is when? REITs (Unit price and Distribution) will be hit because REIT has to pay more interest to the bond holders and banks due to the debt especially REITs with high gearing ratio. The hike of interest will double hit the REIT’s NAV and Distribution. 
  • REITs are sensitive to economy cycles. Any weakness in rental will affect the distribution income.
  • Currency risks for REITs which have the properties oversea.
  • REITs which high gearing may issue Rights to raise more fund to improve the working capital.

It is impossible for us to 100% understand what is happening in the world and how it will affect our REITs portfolio. However we can make better investment decision by analyse the charts using technical analysis. The charts will tell us when to invest or when to take profit / cut loss.

Base on the chart, FTSE ST Real Estate Investment Trust Index is still trading below 200D SMA (long term trend) but there is potential sign of reversal base on chart pattern. However, the upside potential is limited as long as the index stay below the 200D SMA.

FTSE ST REIT Index Oct18-2013

 

 

Similar chart patterns shown in the following REITs, all of them are in consolidation mode but upsides are limited.

Ascendas REIT

2013Oct20-Ascendasreit-800x600

CapitaMall

2013Oct20-CapitaMall-800x600

 

 

CapitaComm

2013Oct20-CapitaComm-800x600

Keppel REIT

Keppel REIT Oct22-2013

Mapletree Comm

Mapletreecom REIT Oct20-2013

Mapletree Ind

Mapletree Ind REIT Oct20-2013

Suntec REIT

2013Oct20 SuntecReit-800x600

 

I will be sharing the Singapore REIT Fundamental Analysis, Technical Analysis and how the interest rate hike will impact your REIT investment in the coming public tutorial on  “How to pick Singapore REIT for Dividend Investing” . Sign up NOW as the seats are very limited due to the classroom size.