Jardine Matheson Holdings, the owner of hotels and groceries around Asia, dropped by the most since August, extending its retreat from a record closing high last month amid concern valuations have become stretched.
Jardine Matheson fell as much as 4.5% to US$59.75 ($75.22), the most since Aug. 8, before trading at US$59.98 as of 3:23 p.m. in Singapore. The shares were the biggest drag on the benchmark Straits Times Index, which was down 0.8%. The stock has retreated about 13% since closing at an all-time high on May 16, which triggered a downgrade from Credit Suisse Group AG four days later.
“We downgraded the stock a few weeks back because we thought their valuation were looking quite rich,” said Gerald Wong, an analyst at Credit Suisse in Singapore. “There are definitely macroeconomic concerns about some Southeast Asian markets like Indonesia, where the Jardine Group has got significant exposure to.” The brokerage cut its rating on Jardine Matheson to neutral from outperform on May 20.
Indonesian stocks declined today. Rupiah forwards touched the lowest level in more than three years and foreign investors sold the nation’s stocks for the 12th consecutive day. Jardine Matheson unit Jardine Strategic Holdings owns 72% of Jardine Cycle & Carriage as of March, according to data compiled by Bloomberg. Jardine Cycle gets about 89% of revenue from Indonesian automotive distributor PT Astra International.
The conglomerate also has interests in Dairy Farm International Holdings Ltd., the owner of Cold Storage, Giant and Wellcome supermarkets, and hotel operator Mandarin Oriental International.
Jardine Cycle dropped 3.9% to $41.92, heading for a one-year low. Dairy Farm lost 0.8% to US$12.40, while Mandarin Oriental slipped 0.6% to US$1.75. Hongkong Land Holdings Ltd. fell 3% to US$6.52, set for its lowest close since Dec. 5. Jardine Strategic declined 2.7% to US$37.16.