EHT up 4%; largest investor offloads shares
Singapore
STAPLED securities of Eagle Hospitality Trust (EHT) staged a small comeback on Tuesday, gapping up at the open as buyers bought the assurance that concerns over the Queen Mary floating hotel were overblown.
Sellers, however, eventually erased most of the early gains.
The counter finished up two US cents, or 3.7 per cent higher at 56.5 US cents on Tuesday, not far from its all-time-low of 54 US cents last Friday - despite touching an intra-day high of 60 US cents on Tuesday.
Some 29.3 million units changed hands, making EHT one of the most heavily traded counters on the Singapore bourse for the day.
The action came after the trust on Monday stressed that expenses for the repair work that the Queen Mary floating hotel requires will not be borne by the trust, but by its sponsor, Urban Commons. The Queen Mary is a retired British ocean liner docked on the shores of Long Beach, California, upon which sits EHT's 347-room hotel.
Separately, regulatory filings released by EHT on Tuesday night showed that EHT's largest investor Frank Shih Chi Yuan had been offloading some of his stake last Friday.
He sold five million stapled securities at 55 US cents each via a married deal. He also disposed of an additional 1.26 million units at 65.9 US cents each via a market transaction on the same day, EHT reported.
The Business Times reached out to EHT to find out how the latter transaction could have taken place, since the counter had traded within a range of 54 US cents and 59.5 US cents last Friday. EHT did not immediately respond to BT's queries.
This isn't the first time that Mr Shih is paring his position.
Prior to offloading some 10 million stapled securities in August at 70 US cents each, he had a 16.3 per cent stake in EHT; his interest has now been reduced to 13.7 per cent following the two recent transactions.
Little is known about his background, but if he is not yet done selling, it could create more uncertainty for EHT, market watchers said.
Just before the closing bell on Tuesday, 3.5 million stapled securities changed hands in married deals done at 56.5 US cents. It is not yet known who was behind them.
In a research note released on Tuesday, UOB Kay Hian maintained its "buy" rating on EHT, with a target price of US$1.02, describing last Friday's sell-off as "irrational".
"We expect positive remarks from the City of Long Beach to allay unfounded fears. The estimated cost of works required is US$7 million, which could be covered by existing capital reserves," the analysts added.
Last Friday, in response to negative media reports, EHT had clarified that it was not losing its lease to run the historic Queen Mary. But EHT's stapled securities still fell 15.5 per cent to 54.5 US cents that day.
EHT followed up with more clarifications on Monday.
