"In my research, I need to see all four indices move in the same direction..."All four indices have now structurally completed a base, and are projected to move higher. You're at the top of the range and three of the four closed above their resistance except for the Russell. If that doesn't close above it in the next couple of days, it could lead to a negative divergencey, and you'd have a sell off,I do think it's real. I do think we've started to see a turn here. I would not be surprised if we pulled back a bit, but this time dips should be purchased. We've been seeing signs for about a month now. October 4 was the key day. Things have really improved technically since then," LaRosa said earlier this week." said Paul LaRosa, chief market technician with Maxim Group .

2011 THIRD QUARTER FINANCIAL STATEMENTS ANNOUNCEMENT

China
In its September 2011 World Economic Outlook report, the International Monetary Fund
projected China’s economic growth to remain robust at 9.5% for 2011 and 9.0% in 2012. The
slightly lower projected growth in 2012 was a reflection of policy tightening and declining
external demand. Nonetheless, China’s growth will continue to outpace other economies.
Retail sales of consumer goods in China remained healthy, with retail sales growth of 17.0%
year on year in August 2011 (Source: National Bureau of Statistics of China). The second
quarter of 2011 saw further expansion by both international and domestic retailers in China, with
fast fashion stores continuing to account for the majority of prime leasing deals. Prime retail
rents increased in cities across China, including in Beijing, Shanghai, Tianjin, Wuhan and Xi’an.
(Source: CBRE).
CMA remains confident of our growth prospects in China and will be opening another three
malls by end this year. China’s underlying economic fundamentals remain strong, and credit
tightening policies by the government provide more acquisition opportunities for CMA. With our
extensive presence in China, CMA is well positioned to capture the opportunities provided by
the growth in Chinese consumption.
Malaysia
The Malaysian retail market performed commendably during the second quarter of this year
whereby private consumption grew by 6.4% with a moderate economy growth of 4.0% (Source:
BNM Quarterly Bulletin, Second Quarter 2011) following a weaker external environment in the
advanced economies.
Retail sales growth is expected to be driven by GDP growth, low unemployment rate, rising
disposable income and growing tourism in Malaysia. CMA is well positioned to benefit from this
spending trend as our malls are essentially focusing on necessity and day-to-day shopping
which will bode well with the current economic environment in Malaysia.
Japan
The Japan’s economy has been steadily improving since the earthquake in March 2011. Latest
GDP growth figures released by the Japanese Government forecast 2011 GDP growth to be
0.6%, and the growth in 2012 is projected to be over 2.0%. Economists expect the GDP will
expand in the 3Q 2011 for the first time in four quarters on the back of recovering supply chain
market and production and consumption. However the Yen's sharp appreciation and a
slowdown of the global economy may have some impact over the economic recovery.
CMA will continue to focus on improving the performance of the assets in Japan.
India
India’s economy grew 7.7% in the three months from April to June 2011, compared with the
same period of 2010 (Source: Ministry of Statistics and Programme Implementation). It was
India’s weakest growth in six quarters. The slowdown is expected to continue as India’s central
bank continues to raise interest rates to control inflation; inflation in July 2011 was 9.22%,
which was well above the Reserve Bank of India’s (RBI) target rate of 4.0% to 4.5%. The RBI is
predicting growth for the whole year of 8% (Source: BBC News).
In India, CMA has a first-mover advantage relative to domestic and foreign real estate
companies focusing on shopping malls, given its portfolio of nine projects. CMA India’s primary
focus in the coming months is to complete the leasing of The Celebration Mall, Udaipur and to
advance the construction of the remaining projects under development.
GROUP OVERALL PROSPECTS FOR 2011
Growth momentum seems to have stalled in US and Eurozone as the debt crisis drags on.
Asian economies are still growing, albeit at a slower pace, with China being the main growth
engine. Where opportunities arise, CMA will continue to strengthen its presence in the region.
CMA has also recently announced its maiden project in Suzhou to develop the largest
shopping mall in the city and increased its stakes in Minhang Plaza and Hongkou Plaza in
Shanghai.

CapitaMalls Asia year-to-date 2011 PATMI increases 25.7% to S$250.6 million (HK$1,506.8 million)

Mr Lim Beng Chee, CEO of CapitaMalls Asia, said, “Shopper traffic in our malls in Singapore
grew 2.9% in the first nine months of this year, compared to the same period last year. More
importantly, our tenants’ sales grew even faster in the same period, at 6.7%. This shows that
the additional shoppers we attract to our malls are spending more at our tenants’ shops. Our
Singapore malls also have an occupancy rate of more than 96.0%, which is higher than the
industry average.”
“In China, our malls achieved 20.6% growth in Net Property Income on a same-mall basis in the
first nine months of this year, compared to the same period last year. This came on the back of
strong growth in tenants’ sales and shopper traffic, which increased 13.3% and 8.4%
respectively in the first nine months of this year. We acquired the remaining stakes in two malls
in Shanghai – Minhang Plaza and Hongkou Plaza – and also announced our maiden project in
Suzhou to develop the largest shopping mall in the city.”
“We continued to build our industry-leading network of 10,000 leases in the region by
organising the inaugural Retail Global Connexion 2011 in Singapore last week, following the
success of our inaugural Retailers’ Forum in Chengdu in May. The Retail Global Connexion
was attended by more than 500 international and Singapore retailers and another 500
Singapore tertiary students. The successful retailers who spoke at the forum were the bosses
of Desigual, Daiso, Country Style Cooking, Awfully Chocolate, Eu Yan Sang, Jeric Salon and
Soo Kee Group.”
“These forums showcase our retailers and provide them with additional opportunities to meet
new investors, business partners, including franchisees, and potential employees. They also
highlight to our retailers our competitive advantage in helping them expand to our malls in the
other countries that we are present in, for our mutual growth. We will continue to explore ways
to add value to our retailers to help them grow, as their success is fundamental to our long-term success.”

The quality of the business model in ARA is undisputed. Trouble is, those guys in the West has cooked up an economic storm and we are likely to face an asset deflationary environment. Yes, ARA does not quite get involved in the prop cycles as they collect fees and does not own any real estate in the books. They do however, hold stakes in REITs and invest capital in their private funds as seed capital. They now have 40m shs in Suntec, 12m in Cache and 23m shares in AMFirst. To elaborate on this topic requires a whole new chapter.

Anyhow, I just saw the latest Jaguar XF and I love it.... but will I pay $265k for it? Likewise, do I want to pay $1.18 for ARA today? Looks cheap now, if you see that ARA was trading @ $1.75 only 4 months ago. Since ARA fundamentals didnt deteriorate since May, (in fact ARA is better today versus May with a $10m kitty coming) ... so was ARA overvalued then, or its undervalued today? Or neither?

Let's look at a common valuation method for asset managers. AUM/Mkt cap... the higher the cheaper.

Ok here goes.

1. ARA is 18.8/0.906 = 20.75X
So who to compare?
ARA took a 15% stake in a Aussie peer (http://www.ara-asia.com/Document_Library/newsLetter/22-Jul-1008-07-54_APN-Placement-220710.pdf) in July 2010. So lets look at APN Property Group.

2. APN's AUM/Mkt cap is 2.253/0.026 = 86.65X
So now we know why John bought into APN... anyway, his entry price is 22cts. Its now doing 16cts.

3. Using ARA's 20.75X matrix, let us also look at CMA. Why CMA? Coz, its got an ARA-business embedded within. (most people don't realise this)
CMA's AUM for their fee-income biz is abt $25bn. So at ARA's valuation, their fee-income business is worth $1.2bn. CMA mkt cap is $4.6bn today but it has got lots of real estates inside there whereas ARA's NAV is their shares in REITs + tables + chairs. Once again, going through CMA's valuation would be a new long winded topic altogether.

--Morten

source nextinsight

News tonight: Trek 2000 International says it has reached an out- of-court settlement with Verbatim Corporation Group, two of eight companies against which Trek filed an International Trade Commission (ITC) complaint for alleged infringement of four USB-flash drive patents.
Under the settlement, Trek grants to Verbatim a non-exclusive, non-transferable, irrevocable license under the licensed patents to make, have made, use, import, offer to sell and/or sell licensed products worldwide during the term of the licensed patents.

Trek’s ITC complaint filed on June 15, 2011 requests an exclusion order from the ITC that prohibits the importation of infringing products into the United States, as well as a cease and desist order prohibiting the sales of infringing products in the United States. The Complaint seeks to block the importation of infringing USB flash drives that violate Trek’s intellectual property rights.

ARA ASSET’S has a REIT management business which is pretty well understood since REITS are listed entities that have been on the market for many years.

Lesser known is its private real estate fund management business, which is a channel for ARA to diversify its revenue sources and something that is all the more relevant when the economic outlook is uncertain.

“Some people think that as a fund manager, we would be affected by economic problems in Europe and the US. On the contrary, if the China property market bubble bursts, that is the greatest opportunity for us because our private real estate property fund manager can then go out and buy,” said CEO John Lim at a recent talk at Kim Eng Securities.

Secondly, unlike equity funds, private real estate funds do not face redemption risk, where a call by investors on capital committed poses liquidity problems for investment manager.

All of its 5 private real estate funds have delivered stellar performances so far. It has an Internal Rate of Return target of 20% and its track record has so far ranged from 23.7% to 64.8%.

ARA's other core business -- REIT management -- is not vulnerable to real estate downturns.

“We manage real estate, but our income does not follow real estate cycles,” said Mr Lim.

As a real estate fund manager, ARA's income is primarily fee-based, so any fluctuation in the value of assets under management affects its income in only a small way.

Unlike equity fund managers, which can have very volatile stock prices due to income being pegged to the stock market performance, ARA’s income is pegged to property valuation and property rental income, which are relatively stable.

Below is a summary of questions raised by investors at the Kim Eng event, and Mr Lim’s replies.

Q: What are the synergies between your REIT management business and its private property fund?

Property funds tend to acquire assets during an up-cycle while REITs prefer to acquire assets under management during a down-cycle when cap rates are high. This diversification improves the income stability of ARA.

Secondly, the REITs that ARA manages are a ready pool of potential buyers for the assets that may be divested by the private property funds that we manage. We receive a commission of about 1.0% from the REIT upon any successful acquisition that it arranges. Also, we have in place stringent rules that ensure such transactions are conducted at arm’s length.
Cheung Kong, which holds 16% in ARA, is one of the region’s largest real estate developers, and the alliance certainly helped us become one of the region’s largest real estate fund managers.
Q: What sectors and geographies are you looking at for expansion?

Our core markets where we have listed our REITS - China, Hong Kong and Southeast Asia, including Singapore and Malaysia. These are markets where we are relevant and strong, where we have very good network and connections. And we will continue to grow in those markets.

The other markets in Asia are Japan, India, Australia and the Middle East. We have made some headway in two of these countries. We have invested in a small Aussie fund manager, APN, with A$2 billion of assets under management. It has a similar recurring fee-based income model as us. We hope to invest in Australia through this vehicle.

We also have a partner in Qatar to do hospitality trusts. But we intend to hold back on our Middle East expansion for a while. We are still working on Japan and India. India is a very tough market to crack. China is going to be the immediate focus for the next couple of years.

As for sectors, to be honest, we do anything that has to do with real estate without actually buying the physical real estate. We do mezzanine loans to real estate. We do REITS to real estate. We do under-performing loans. We cover all sorts of shapes and sizes, from a private fund to the public market.

Q: Is there any opportunity for you to raise your fees?

For the REIT product, the answer is no. The reason is because the REIT is an established product in Singapore, Hong Kong and Malaysia.

But for private fund management, the answer is yes. How much we charge depends on our track record, the product and the market. For example, given the current economic outlook, if we are able to do a non-performing loan fund and bring in the returns, we have a lot of leeway in the rates we command.

Similar to boutique fund managers, if we have this gilt-product and the connections, people are even willing to pay 5%. On the other hand, if we offer a product that anyone can do, then we have to reduce our fees to be competitive.

In general, the whole industry doesn't compete on fees. We are not property agents. People come to us because we are good in terms of our track record, not because we are cheaper.

Being cheap is no use if we can’t deliver. Our customers are coming in with S$5 million to S$500 million in ticket size and fees are not an issue. If we cut our fees, the institutions think we are desperate and we lose our business. So we even raise our fees when rolling out premium products. In this type of market, if I outperform my target, I will charge a higher rate for the portion on profit sharing.

source: nextinsight

ARA Asset Management group CEO John Lim has bought another 1 m shares of his company, just about a month after accumulating 2 m shares.

The latest purchases were made on Sept 27, 28 and 29 at an average of $1.208 apiece.

That brings his direct shareholding to 5.21 million shares, or a 0.68% stake in the company that he co-founded.

He has a deemed interest in 281.1 million shares, or a 36.59%.

His purchases were the first in at least a year, and were made amidst the recent market turmoil. ARA stock has come off from its 52-week high of $1.76 achieved in late May this year.

Currently sporting a market cap of about S$1 billion, ARA is a real estate fund management company that focuses on the management of public-listed real estate investment trusts, REITs.

An affiliate of the Cheung Kong group, ARA manages REITs, private real estate funds, specialist equity funds and offers corporate finance advisory services.

It reported an 18% increase in net profit to S$29.6 million for the six months ended 30 June 2011. Total assets under management soared 36% to a record S$18.8 billion as at 30 June 2011 from S$13.8 billion a year ago.

source:nextinsight