HPH Trust in bloodbath with Temasek Holdings

It is case of lightning strike twice for Temasek Holdings! Investors of HPH Trust must be left punching the wall as the unit price of the business trust collapsed following the announcement of HPH Trust being given the boot from the prestigious Straits Times Index (STI) on 5 September 2019. Temasek Holdings is a major shareholder in both HPH Trust and Asian Pay TV Trust.

In 2018, unit price of Asian Pay TV Trust plunged after the business trust announced massive cut in distribution. For HPH Trust, the collapse of its unit price should be triggered by both the violent Hong Kong protests and the recent exit from STI. The exit from STI also came at a bad timing. When SIAEC (2017) and StarHub (2018) were booted out of STI, the share prices went into a tailspin. On this basis, I expect unit price of HPH Trust to crash into the wall in the coming weeks.

HPH Trust

The huge decline in HPH Trust and APTT would have inflicted some form of damages to Temasek Holdings as the sovereign wealth fund holds 14% stake in the former and 7.9% in the latter. Notwithstanding this, given Temasek Holdings’ widely diversified portfolio, I don’t expect the collateral damage to be significant or fatal enough to sound the alarm bell. However, the same cannot be said for retail investors who did not practise sensible portfolio diversification.

Will HPH Trust sink or swim? Make no mistake, this business trust is 27.6% owned by “Asia Superman” – billionaire Li Ka Shing. When HPH Trust debut in SGX mainboard in 2011, the IPO price was between USD0.90 to USD1.10. But after the dream debut, unit price had a horror run of decline. Currently trading at USD0.16, shareholders must be having plenty of sleepless nights. Should existing investors run for their lives or keep faith with Li Ka Shing?

HPH Trust plagued by unfortunate events

Making money with big boys like Temasek Holdings and Li Ka Shing is never easy for the retail investors. With the massive decline in the unit price, a burning question is whether current trading level of HPH Trust represents a good buying opportunity.

In my last article on HPH Trust, I gave a thumbs down for this counter, citing both the challenging operating environment and the structural changes in the shipping industry. Indeed, the situation had worsened considerably and the unit price continued to spiral out of control since then. It appears to me that HPH Trust is not going to see light at end of the tunnel anytime soon. But then again, no crisis lasts forever. To make money out of this counter, investors need to [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: September 10, 2019 — 1:40 pm

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