Hot stock: CapitaLand hits eight-year low

SHARES in property behemoth CapitaLand hit an eight-year low on Monday, amid broad market gains on the Singapore bourse.

The counter lost S$0.04 or 1.6 per cent to S$2.53 as at 2pm, creating a new 52-week low. The last time it fell below this level was back in June 2012. Some 6.2 million shares changed hands.

By 3.10pm, the counter sank even further to S$2.52, down S$0.05 or almost 2 per cent, with 12.4 million shares traded.

Meanwhile, the benchmark Straits Times Index was up 0.8 per cent or 18.99 points to 2,442.83. Decliners outnumbered advancers 227 to 167, after 878.7 million securities worth S$762.9 million changed hands.

Among the index securities, CapitaLand was the worst performer by percentage by the afternoon trade and the third worst decliner by value - behind fellow property counters UOL and City Developments Limited (CDL). UOL dropped S$0.12 or 1.9 per cent to S$6.10, while CDL was down S$0.12 or 1.9 per cent to S$6.22.

ShareInvestor data showed that there were no married trades done for CapitaLand shares, though a number of large trades, with a value of more than S$150,000 each, were transacted.

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Last month, analysts mostly viewed the stock favourably. HSBC issued a "buy" recommendation with a target price of S$3.60 on Oct 15, while Macquarie had an "outperform" call with a target price of S$3.95 as at Oct 8, data from Bloomberg shows.

Likewise, RHB Research had a "buy" rating on CapitaLand, with a price target of S$3.75 as at Oct 4.

In response to queries by The Business Times on Monday, RHB analyst Vijay Natarajan noted that while there is no stock specific news flow he is aware of, CapitaLand's share price fall of about 2 per cent on Monday seems in line with real estate counters.

"I believe the news of Robinsons' exit and spillover effects on other retail players may probably be weighing on share price as CapitaLand is among the biggest retail landlords in Singapore," said Mr Natarajan.

He added that the retail segment is one of the largest in CapitaLand's portfolio, accounting for 28 per cent of its assets under management as at H1 2020.

"At current price level, the stock is trading at a deep discount of about 50 per cent to its revalued net asset value, which we believe is attractive," Mr Natarajan noted.

CapitaLand will be releasing its third quarter business updates this Wednesday.