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Hongkong Land looks like a bargain even after break with IOI Properties

Benjamin Cher
Benjamin Cher3/26/2018 08:00 AM GMT+08  • 6 min read
Hongkong Land looks like a bargain even after break with IOI Properties
SINGAPORE (Mar 26): Shares in property development and investment firm Hongkong Land Holdings dipped slightly after Malaysia’s IOI Properties Group announced that the two companies had terminated a proposed joint venture. They closed on March 20 at US$6
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SINGAPORE (Mar 26): Shares in property development and investment firm Hongkong Land Holdings dipped slightly after Malaysia’s IOI Properties Group announced that the two companies had terminated a proposed joint venture. They closed on March 20 at US$6.91, down 2.1% year-to-date, giving it a market capitalisation of US$16.3 billion ($21.5 billion).

But the stock’s decline may be due to a general weakness in investor sentiment rather than the market’s assessment of Hongkong Land’s prospects without the IOI deal. On a year-to-date basis, the FTSE ST Real Estate Index is down an even larger 2.9%. In fact, Hongkong Land looks like a bargain just now.

IOI had signed a memorandum of agreement with Hongkong Land to jointly develop a land parcel at Central Boulevard in Singapore. In an announcement on Bursa Malaysia on March 13, however, IOI says certain conditions could not be fulfilled by the long-stop date of March 12. These conditions include approvals from URA, lenders and Bank Negara Malaysia, as well as remission approvals for additional conveyance duties and additional buyer stamp duties.

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