Wharf Real Estate (1997.HK): Under Pressure Below HK$31.90

The Hong Kong local property stock is one of the weakest sectors in the Hang Seng Index as Hong Kong is suffering the third wave of coronavirus. Wharf Real Estate (1997.HK) was trading around the 52-week low, but the Hang Seng Index rebound around 15% from March low.

Downtrend 4

The Hong Kong local property stock is one of the weakest sectors in the Hang Seng Index as Hong Kong is suffering the third wave of coronavirus. Wharf Real Estate (1997.HK) was trading around the 52-week low, but the Hang Seng Index rebound around 15% from March low.

Hong Kong's retail sales dropped 24.8% on year in June (vs -24.0% expected, -32.9% in May), according to the government. The gloomy retail sales outlook could affect the leasing income and the valuation of the property for the company.

Recently, Wharf Real Estate, a Hong Kong based REIT, posted 1H net income down 26% on year to 3.84 billion Hong Kong dollars. The company declared an interim dividend of 0.78 Hong Kong dollars per share, down from 1.10 Hong Kong dollars in the prior-year period.

From a technical point of view, the stock retreated from HK$39.05 and returned the level around the 52-week low. 

Besides, the death cross between 20-day and 50-day moving averages has been identified, suggesting a bearish signal.

The RSI is below its oversold level at 30, but has not displayed any reversal signal.

Bearish readers could place the nearest resistance level at HK$31.90 (38.2% retracement), while the support levels would be located at HK$27.90 and HK$22.80 (138.2% expansion).


Source: GAIN Capital, TradingView.

More from Equities

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.