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Hot stock: EHT up 8.3% after sponsor says it will pay for Queen Mary repairs
STAPLED securities of Eagle Hospitality Trust (EHT) staged a comeback on Tuesday morning, advancing 8.3 per cent, or 4.5 US cents to 59 US cents as at 10am, after the stock plunged last week, skirting near its 52-week low of 54 US cents.
Some 7.4 million units changed hands, making it one of the most heavily traded counters on the Singapore bourse in the early morning trade.
This comes after the trust on Monday noted that all expenses for the repair work that EHT's Queen Mary floating hotel requires will not be borne by the trust, but instead by its sponsor, Urban Commons.
EHT also clarified that a 2017 marine survey of the Queen Mary, that resurfaced in media reports last week, is now more than two-and-a-half years old, and "grossly overstated the nature, scope and cost of the repairs required at the Queen Mary".
The Queen Mary is a retired British ocean liner docked on the shores of Long Beach, California, upon which sits EHT's iconic 347-room hotel. The 2017 marine survey had estimated that total repairs for the Queen Mary could range from US$235 million to US$289 million.
Last Friday, in response to negative media reports published first in the US and in Singapore a few days later, EHT had clarified that it was not losing its lease to run the historic Queen Mary.
But a knee-jerk reaction shaved 10 US cents off EHT's stapled securities, which closed 15.5 per cent lower at 54.5 US cents that day. It was one of the most actively traded, with 32.8 million stapled securities changing hands.
"At its trading price of 55.5 US cents, the relative strength index (RSI) is around 11.5, which suggests EHT units are oversold," Ernest Lim, a remisier, said.
The RSI is used to measure the speed and change of price movements to evaluate overbought or oversold conditions in equities.