Property REIT

Bernanke : Commercial Property May Pose Risk for Economy

Commercial real estate could be the next catalyst for a major market correction….. (according to Bernanke).

Among the key points noted:

1. Commercial market is potentially bigger than the residential market (hence, a much larger problem here)

2. Increased vacancy, declining rents, falling prices. That almost sum up the 3 pillars of real estate. If all of them are still falling, then we have not seen the bottom yet. It is still falling. Companies are still not hiring. More restructuring are going on.

3. Which leads me to the third point. Debt ratio. Essentially, now is the worst time to go ‘long’ on property related stocks (including REITs). Lots of them are highly geared and with falling demand, prices and rents, it is extremely difficult for them to increased revenue. I am not sure how they are going to raise the funds to pay. But, I see a possible repeat of GM, or CIT.

4. At some point in time, the musical chair party will stop. And some will no longer be with us. So, do be careful out there.


Credit Suisse Selling ACC and ARE among many others.

GR pointed me to the MMFAIS site, highlighting how CS has been selling lots of stuffs (err.. I mean holdings).

Among the very long list includes counters like ACC and ARE; both are REITs.

The interesting fact here is 100% of both counters are sold off.

A lot of the sales took place this month (May 2009).

Maybe, it does not mean anything at all. Since I do not know how CS operates. But, I guess 100% sale can suggest that it is not attractive to hold them long term.


ACC : Update

Richard Woon has an update on the dividend for ACC on SeekingAlpha. In the article, he highlighted some of the possible outcomes. I encouraged for those who are more interested in the fundamentals of ACC to visit the site and read it.

Personally, I shorted ACC yesterday. The position is meant to be short term trade.

1. With yesterday’s drop, we can see that the opening price was right below the 200 day EMA. A perfect indicator to hold ACC’s advances!

2. Over the next few days, the fear indicator from the Swine flu will continue to have an impact on the market. I remember that during the SARS days, the fear was at its height. People were grabbing the N95 masks (and any other masks available in the market) for protection. A lot of it will depends on whether this bug will continue to spread.

3. For now, I will just stick to some simple support level and take profit wherever the opportunity presents. Support level 1: 20.74.  Support level 2: 18.96

4. Do note, that at this moment, this is not a bearish trend. Rather, it is more of an intraday play. We can also see from the chart, that the volume for selling is pretty high as well. I suspect this is just some smart investors/traders taking profit. But, if the selling persists with high volume, those who are ‘long’ in this counter might want to take note that it could be the ‘big boys’ selling.