Hongkong Land share price plunged to 14-year low

Lifetime Membership Amid the bearish market condition, many SGX stocks, with the exception of local bank stocks, have been in sluggish form. However, Hongkong Land share price stood out as it sunk to a new low recently. On 25 October 2023, Hongkong Land share price plunged to a 14-year low to hit US$3.10. Year-to-date, Hongkong Land share price sank 28%, making the counter one of the worst performers of the Straits Times Index (STI). Interestingly, Hongkong Land share price performed even worse than Seatrium, the perennial whipping boy in STI. What on earth has happened to this leading light of SGX?

For background, Hongkong Land is one of the most venerable listed companies in Singapore, with a long history of 130 years. Possibly, only Boustead, OCBC’s Great Eastern and UOB’s Haw Par Corp can match Hongkong Land in terms of pedigree and history. If you are talking about prestige, Hongkong Land is even more impressive as its parent company is none other than the famous Jardine Matheson Holdings. Together with DFI Retail Group, Jardine C&C and Jardine Matheson Holdings, Hongkong Land forms the “Hong Kong Four Tigers” that rule STI for many years.

Under the Jardine Matheson Group, this network of companies establishes an impenetrable fortress in the SGX mainboard. With such a strong support, Hongkong Land will surely ride out the current market downturn. Nonetheless, when will light at end of tunnel arrive for Hongkong Land share price?

What should be alarming for investors is that the current Hongkong Land share price is even lower than May 2020, the darkest period of COVID-19. The devastating form of Hongkong Land share price prompted the Group to launch an aggressive shares buyback programme. Year-to-date, the company has repurchased 20.3 million shares. Since it announced its first share buyback plan back in Sep-21, Hongkong Land has bought back a whopping 126.5million shares for about US$625 million.

The woes of Hongkong Land are largely caused by the property slump in Hong Kong. Due to the high interest rates, market sentiments had been bearish for residential properties on Hong Kong and China mainland. Post-pandemic hybrid work trend has also become entrenched globally. And Hong Kong is no exception, with office leasing demand remaining subdued. This led to increasing vacancies for Hongkong Land’s Central office portfolio, thereby shaking investors’ confidence in Hongkong Land share price. Given the dismal performance of Hongkong Land share price, will it be booted out of the STI?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 and have never invested in Hongkong Land before. Whether Hongkong Land 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.

Hongkong Land share price braces in tale of two cities

The lost time I covered Hongkong Land share price was in October 2019. I predicted that the counter would correct to US$3.30 and that I would consider investing in the stock. However, that was before the arrival of the pandemic. Back in 2019, the risk for Hongkong Land was all about the relentless civil unrests. Now, the risks stemmed from the high interest rates and soft leasing activities.

Hongkong Land’s Hong Kong investment assets are strategically located in the financial district of Central. The 12 interconnected prime commercial buildings provided 450,000 sqm of Grade A office and retail space. In Singapore, the Group’s investment assets are in One Raffles Link, One Raffles Quay and the Marina Bay Financial Centre Tower One, Two and Three. The Investment Properties segment offers the Group a stable and recurring income.

Although the Group has been claiming that its Central office portfolio in Hong Kong continued to outperform the overall market, what is shocking for me is [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.]

For members of SG Wealth Builder logging in from Apple or Mac devices, please access through this link. This allows for one-time log in only (instead of having to key in user-id and password twice).

Congratulations on your first step to becoming part of SG Wealth Builder community! For a one-off payment of $100, you can get full access to all the articles and enjoy the benefits of SG Wealth Builder Membership.

The full benefits and privileges of SG Wealth Builder Membership:

1. Access to the latest premium articles of SG Wealth Builder
2. Email notifications of latest blog articles
3. Request for coverage on stocks, insurance and other personal financial topics
4. Comment in articles

Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.