Amidst the IPO hype, SPH lags

Good day all,

The recent hype over the listing of SPH Reit and OUE Hospitality Trust just bowed over. We did not get huge spikes on IPO day and the following sessions. I was not surprised seeing how the yields are just about right. SPH Reit’s yield is already on the low side, so any further price appreciation will drag the yield to a relatively low territory of 4%. When it comes to local Reits, I believe it is all in the yield and what it says about the level of risk. How much  yield is the market willing to take from a Reit under the prevailing market conditions. Two or three years back, the Reits were paying yields of as high as 10%! But, as the world economy started looking brighter compared to 2009, Reits were pushed up and yields had to decline. The level of risk had dipped and there was no reason for such an instrument to be paying 10% distributions. Anyways, enough of Reits; I am looking at SPH,T39.SI, for today.

SPH started the year with a bang as share price pushed through strong resistance at $4.25. This level was where SPH made a first high post-crash. After gapping up in March, SPH tested the support level several times. The support held strong until a break to the 200-day MA in June. Just like the STI and quite a number of other counters, SPH formed a confirmed inverted head and shoulders. Friday’s high broke through the right shoulder on month-high volume. However, SPH is lagging the other counters with the same set-up. This represents a chance to get in on a pattern play that is confirmed by other counters sharing the same scenario.

 

t39

 

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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