After hitting a record high of $3.05 in October 2020, Keppel DC REIT (AJBU) share price lost its explosive steam and crashed to Earth. What on Earth is happening to the data-centre S-REIT? That month also saw Keppel DC REIT being included in the Straits Times Index (STI). In this blog, I have always stressed that being included in the STI is a double-edged sword – there are benefits in terms of increased stock liquidity. On the other hand, there are also risks which I will share in this article.
The last time that I covered Keppel DC REIT share price was in June 2022. Back then, the counter was trading at $2.05. Fast forward three months later, Keppel DC REIT share price continued its sluggish form, falling to the dismal $1.80 level. A member of SG Wealth Builder has written in to express her concerns on the falling Keppel DC REIT unit price.Currently, I am holding to another STI constituent – Mapletree Logistics Trust. Just like Keppel DC REIT, Mapletree Logistics has been in a severe bout of correction mode since last year, falling by 13.8% year-to-date. As such, I can share the feelings of Keppel DC REIT unitholders right now as I face the same predicament as them.
The thing about STI is that it is an index that tracks the overall performance of the Singapore stock market. Another thing to note is that STI is heavily influenced by institutional fund houses. These movers and shakers will buy and sell stocks listed in STI to reflect the existing macro-economic condition. In view of this, the overall STI movements, and its underlying constituent’ stock prices may not reflect the constituents’ business performances accurately.
Notwithstanding the above, institutional fund houses do have a major sway on the share prices of STI components. Take for example, the last time that Keppel DC REIT hit the top ten institution net buy list was in October 2020. Since then, the counter never made it to this list. The lack of buying interest from the institutional fund houses could have attributed to the weak form for the past 2 years. Another factor could be due to its acquisition of M1 and Singtel’s entry into data centre business.Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested in Keppel DC REIT (AJBU) share currently. Whether Keppel DC REIT (AJBU) share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Keppel DC REIT share price ambushed by Singtel and M1?
Since April 2021, Keppel DC REIT share price rolled off the cliff when it announced [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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