SReits are beginning to show weaknesses

It would be so boring if I write another blog post about what I bought again. So I will start with a different topic before doing a short one on my “Buy” this week … Yes, its another “Buy” week for me amidst all the chaos in the market recently.

SReits are beginning to show weaknesses

While reviewing my SReits watchlist, I am seeing “reds” coming out from many SReits counters. In my watchlist, about 1/4 of the SReits are showing up as “red” – I have programmed them to show up as red if they drop more than 3% in the month compared to the last trading day of the previous month.

It is the first time in many weeks (or months) that I am seeing so many reds and no “green” – green meaning the opposite of read, i.e. increase more than 3%. I personally feel that the 3% mark is substantial enough to signal a change in the trend / direction …

Among the worst hits are:

  1. Frasers Logistics
  2. Ascott Reit
  3. CDL Hospitality Trust
  4. Parkway Life Reit
  5. Starhill Global

Part of the drop could be due to some of them having gone “ex-div”. But is it all the reason? In my opinion, I doubt. I think it may signal a change of trend/direction for SReits. Only time will tell.

For reference, the Lion-Phillip S-REIT ETF, which is a good reflection of the SReits performance on our local market, has also dropped 2%.

If it continues to drop, opportunity may arise for me to replenish my SReits holding.

photo of person pressing the button of pedestrian box
Photo by Lukas Hartmann on Pexels.com

Buying Hong Kong Land

Changing topic … my main buy target this week was Hong Kong Land.

I started accumulating it as its share price began to drop below US$6 on Monday and I bought Hong Kong Land shares almost everyday since then. It continued to slip over the week and as of Friday, its $5.45. So my investment in Hong Kong Land is in red now. 

I think investors are fearing the worst about the seemingly endless protests in Hong Kong and emotions had taken over. I am also concerned but I think the selling is overdone.

Hong Kong Land’s Financials look pretty solid

  • Its trailing P/E is now only 7.3
  • Its book value is worth US$16.5.
  • Its balance sheet is still healthy with net gearing at 10%.
  • Although it revealed that its first half profit plunged 63% to $411 Mil, it was mainly due to revaluation of its investment properties and not recurring cash flow from investment properties.
  • Underlying earnings per share stood at 19.96 US cents, actually up 3 per cent year-on-year.

I believe the recent share price weakness is driven by fear and emotion and it should recover when situation in Hong Kong becomes more stable. Furthermore, it also has substantial presence in Singapore. It is hard for me to imagine that Hong Kong will plunge into extreme chaos and cannot recover from it.

people on pedestrian lane
Photo by Jimmy Chan on Pexels.com

I hope I am right in the long run. In the time being while I wait it out, I will be contended with a 3% dividend yield.

Have a nice long weekend folks if you are a Singaporean resident.

Majulah Singapura, Happy Birthday Singapore.

See you, take care,

Warriortan

 

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7 thoughts on “SReits are beginning to show weaknesses

  1. Hi, great to see we are of like mind in this. I like yourself, have recently been buying heavily into Hongkongland USD. I have accumulated from SGD 5.7 downwards to its current levels. Just wondering which broker/ modality you use to convert and then store SGD to USD, because I use DBS multicurrency account, and the spread is madness.

    Liked by 1 person

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