Conglomerate Keppel Corporation, a constituent of Singapore’s benchmark Straits Times Index (STI), operates in four main businesses:
1. Offshore and Marine – Provides leading solutions and services to support safe and efficient maritime operations and the harvesting of energy for urban development
2. Property – Develops homes, offices, commercials, as well as integrated developments
3. Infrastructure – Its portfolio comprises of power and gas, environmental engineering, logistics and data centre businesses
4. Investments – The conglomerate’s investment business comprises asset management (in Keppel Capital, which manages 3 Singapore-listed REITs in Keppel DC REIT, Keppel Infrastructure Trust, and Keppel REIT), urban solutions (in Keppel Urban Solutions, an end-to-end master developer of urban developments), and telecommunications business (in M1 Limited, one of the three main telcos in Singapore)
In this post, you will find my technical analysis of Keppel Corporation (SGX:BN4), along with REITs Keppel DC REIT (SGX:AJBU), Keppel Infrastructure Trust (SGX:AJBU), and Keppel REIT (SGX:K71U) – particularly, you will learn about their recent share price movements, how their share prices are likely to move in the near-term, and also how I may possibly short-term trade in them.
As usual, a disclaimer before I continue – everything that you may read below is based solely on my own opinion based on my technical analysis, which I am sharing purely for educational purposes only, and they do not imply any buying or selling recommendations for any of the companies. As always, please do your own due diligence before you make any short-term trading/long-term investing decisions.
Keppel Corporation (SGX:BN4)
Blue chip conglomerate Keppel Corporation (SGX:BN4) reported a weaker set of results for the first half of financial year 2020, where its net profit sank to a net loss of S$537m (compared to a net profit of S$356m), mainly due to S$930m of impairments related to Keppel Offshore & Marine’s stranded assets, receivables, stocks, and share of impairment provisions from Floatel. Excluding those, it would have registered a net profit of S$393m (an 5% increase on a year-on-year basis), underpinned by resilient operations from the other businesses in the Group.
Following this, Bloomberg reported that Temasek Holdings may be prepared to walk away from its voluntary pre-conditional cash partial offer for 30.55% of Keppel Corporation’s shares at S$7.35/share (a detailed report on the offer can be found in Temasek Holdings’ website here) According to a news report by the Reuters, a decision will be made by 31 August (you can read the news report in full here.)
So how has the conglomerate’s share price moved in recent months? Let us take a look at its movements (since late-October 2019) on a daily timeframe below:
Following the news of Temasek Holdings’ pre-conditional cash partial offer for shares of Keppel Corporation on 21 October 2019, its share price gapped up from S$5.84 that day to a high of S$6.84 the following day (22 October 2019.)
Subsequently, its share price moved in the range of between S$6.68 and S$6.88 till end-February 2020 before it started on a downward descend, where its share price fell to a low of S$4.82 in late-March 2020 before recovering to about S$6.30 in early-June and then it dropped again. Keppel Corporation’s share price closed at S$5.21 yesterday (04 August).
Looking at the technical indicators, while MACD is still in a downtrend, but stochastic have already reversed into an uptrend, suggesting that in the near-term, the share price of the conglomerate could possibly recover to about S$5.50 (where the blue-dotted line is.)
Personally, I will only look to short-term trade in the shares of Keppel Corporation at above S$6.00 – the point where the share price breaks out of the red downtrend channel. Also, I will wait for confirmation in terms of the appearance of a bullish candlestick, along with technical indicators MACD and stochastic to be in an uptrend position.
Keppel DC REIT (SGX:AJBU)
Keppel DC (Data Centre) REIT is the first pure-play data centre REIT to be listed on the Singapore Exchange.
Currently, the REIT’s portfolio has 18 data centres in the various countries – Australia (4), Germany (2), Ireland (2), Italy (1), Malaysia (1), Singapore (6), The Netherlands (1), as well as in the United Kingdom (2).
Let us take a look at how the REIT’s unit price have moved since May 2020:
Its unit price have moved in an upward direction along the green uptrend channel, where its unit price have climbed from a low of S$2.22 in mid-May to a high of S$3.07 in early-August, a new 52-week high (an increase by slightly over 38% in about 2.5 months.)
The data centre REIT’s unit price closed at S$2.98 yesterday (04 August), where the support line of the green uptrend channel is. Looking at the technical indicators, while MACD is still in an uptrend, but it looks like it is turning downwards, and stochastic have turned into a downtrend. As such, in the near-term, I am of the opinion that its unit price may fall to around the S$2.90 level.
Personally, I will not be looking to short-term trade in this one as I am not comfortable in trading in companies where their share prices are close to its current 52-week high.
Keppel Infrastructure Trust (SGX:A7RU)
Keppel Infrastructure Trust’s portfolio comprises of assets in the Distribution and Network business, Energy business, as well as Waste and Water business. According to the trust’s website (you can read more about it here), it is the largest diversified business trust listed in Singapore with over S$5 billion in assets under management.
The following the trust’s unit price movement since late-May 2020:
As you can see from its unit price movements above, the trust’s unit price has been moving in a range of between S$0.520 and S$0.550. In terms of its technical indicators, its MACD has been flat, and its stochastic have just reversed into an uptrend. In my personal opinion, its unit price in the near-term could once again reach the resistance line at S$0.550.
If I were to look to enter on a short-term trade in the trust, I will likely wait for its unit price to come again go down to the support line at S$0.520, and at the same time, wait for a bullish candlestick to appear, along with technical indicators MACD and stochastic to be in an uptrend.
Keppel REIT (SGX:K71U)
Listed in 28 April 2006, Keppel REIT is one of Asia’s leading REITs with a portfolio of premium Grade A commercial assets in prime business and financial districts in pan-Asia.
At the time of writing, the REIT’s portfolio consists of a total of 9 office properties in Singapore (Ocean Financial Centre, Marina Bay Financial Centre, and One Raffles Quay), Australia (8 Chifley Square in Sydney, 8 Exhibition Street in Melbourne, 275 George Street in Brisbane, David Malcolm Justice Centre in Perth, and Victoria Police Centre at 311 Spencer Street in Melbourne), as well as in South Korea (T Tower in Seoul.)
With that, let us now take a look at how the REIT’s unit price have moved in recent months (since early-April 2020):
From a low of S$0.880 in early-April, the REIT’s unit price have gradually recovered to a high of S$1.22 two months later (in early-June), before retreating to about S$1.07 in mid-July and then moving in a tight range of between S$1.07 and S$1.11 since.
At the end of trading session yesterday (04 August), its unit price closed at S$1.10, with MACD flat and stochastic reversing into a downtrend. As such, in the near-term, I am of the opinion that its unit price could fall to around S$1.07 (the lower end of the range.)
Finally, if I were to short-term trade in the REIT, I will wait for its unit price to fall to around S$1.07, and at the same time, only enter when I see a bullish candlestick, along with technical indicators MACD and stochastic in an uptrend.
Out of all the four I have looked at, Keppel DC REIT is in my “shopping list” where I intend to add to my long-term portfolio, as I am of the opinion that the demand for data centres is only going to become stronger with time as more and more countries move to becoming a “smart nation”.
As for the rest, I may or may not be short-term trading them depending on the overall market condition at a particular point in time. Finally, as mentioned above, everything that you have just read above is purely for educational purposes only, and you should always do your own due diligence before you make any trading/investing decisions.
Disclaimer: At the time of writing, I do not own any shares of Keppel Corporation, Keppel DC REIT, Keppel Infrastructure Trust, and Keppel REIT.
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