Property stocks rise: Hongkong Land surges on $1.1b asset sale; CDL up despite board tensions

SINGAPORE - Hongkong Land was the biggest gainer on the Singapore stock market index last week, leaping almost 13 per cent to close April 25 at US$4.64.

The property group on April 24 announced that it will be selling the top nine floors and retail podium of its landmark 50-storey One Exchange Square in Hong Kong to the city’s stock exchange operator, Hong Kong Exchanges and Clearing (HKEX), which will make the site its permanent headquarters.

HKEX will also lease more office space in Two Exchange Square, where it is currently located.

The moves, involving almost 150,000 sq ft of space and valued at HK$6.3 billion (S$1.07 billion), will directly contribute to Hongkong Land’s earnings in 2025 and 2026. The purchase price was arrived at through arm’s length negotiations and reflects the asset’s book value as at Dec 31, 2024, Hongkong Land said in a statement.

The company added that around 20 per cent of the proceeds will be used to finance a US$200 million share buyback programme in 2025.

As the repurchased shares will be cancelled, there will be fewer shares outstanding, implying that each share held by shareholders will represent a bigger slice of the company’s earnings and assets. This can potentially lead to higher earnings per share and a potentially higher stock price.

The remainder of the proceeds will be used to reduce net debt and lower financing costs on the planned enhancements to One Exchange Square.

CDL rises despite board tension

City Developments Limited (CDL) shares also rose last week, closing just under $5 on April 25, up 6.4 per cent, despite ongoing tensions among its board of directors at the property developer’s 2024 annual general meeting on April 23.

Shareholders also voiced dissatisfaction over how CDL handled communications over a tussle for board control between executive chairman Kwek Leng Beng and his son, group chief executive Sherman Kwek, which took place in February, and the lack of direction on how to move the company forward.

The bone of contention remained the manner and intent behind the appointment of two new independent non-executive directors to the board in February.

At the AGM, non-executive director Philip Yeo expressed unhappiness that the appointments of Ms Jennifer Duong Young and Ms Wong Su Yen did not go through the nominating committee. Mr Yeo was also disappointed that the decision to appoint Ms Young and Ms Wong was not unanimous and disregarded the chairman’s position on the board.

This had played a role in the elder Kwek filing a Feb 26 lawsuit to restrain the two new directors from exercising their powers, and to stop his son and the majority directors of CDL from implementing several board resolutions he claimed were aimed at overthrowing him.

That lawsuit led to a public two-week spat between father and son, sending CDL’s shares to a 16-year low in March, before the elder Kwek abruptly withdrew the suit on March 12 for the sake of the business.

Despite tensions between the board’s members and Mr Yeo voicing his view that Ms Young and Ms Wong should not be re-elected, more than 99 per cent voted the pair back on the board. The Kwek family controls nearly half of CDL’s shares.

Mr Kwek Leng Beng told The Straits Times he was “very happy” with the outcome.

“Look at it from a long-term perspective. Rest assured, I am very confident. Now we can look at the bigger picture,” he said.

Mr Sherman Kwek said CDL will look into divesting some $600 million worth of assets to better manage its high gearing and interest expenses, and re-explore packaging its UK commercial assets into a real estate investment trust to be listed in Singapore when conditions are right. CDL shelved the listing plan in late 2022.

Other market movers

Several stocks hit their highest levels so far in 2025 last week.

Singapore Exchange (SGX) rose to a high of $14.80 on April 24, as the volatility triggered by the escalation of the trade war between the United States and China brought retail investors back to the market looking for bargains.

According to data provided by the exchange, retail investors bought a net $1.16 billion worth of Singapore stocks from April 1 to April 23. In the first half of April alone, they bought $1.42 billion worth of shares, even as the Straits Times Index (STI) fell 10.7 per cent from 3,972.43 to 3,548.91.

The 10 most heavily bought stocks by retail investors during this period were all STI constituents – DBS, OCBC, UOB, Keppel, Venture Corp, Yangzijiang Shipbuilding, CapitaLand Investment, Seatrium, Mapletree Logistics Trust and Sats – which fell an average of 13.9 per cent.

Outside the STI, retail investors also bought stocks like iFast, Keppel DC Reit, UMS Integration, Singapore Post and Suntec Reit, which dropped an average of 11.2 per cent.

Some other stocks that jumped last week include ST Engineering, which hit an all-time high of $7.42 on April 22, and AEM Holdings, which rose by almost 13 per cent to close the week at $1.22.

In responses to pre-AGM questions, AEM emphasised that despite concerns that some of its products could be impacted by the US tariffs, its US shipments account for a small share of revenue, and most of its test equipment is shipped internationally, remaining largely unaffected by US tariffs. 

Other semiconductor stocks like Frencken Group, Grand Venture Technology and UMS Integration also rose 10 per cent, 9 per cent and 7 per cent respectively through the week.

What to look out for this week

Shares of Yangzijiang Shipbuilding and Yangzijiang Financial Holding might see some trading activity, after the latter on April 27 said it is exploring spinning off its maritime investments business into a new incorporated company that will be listed separately on the mainboard of the SGX.

The firm, previously the financial arm of Yangzijiang Shipbuilding, said the move will help it to unlock its full growth potential.

The proposed transaction involves transferring the group’s maritime investments assets to a new group, which will function as a dedicated maritime investment platform.

Yangzijiang Shipbuilding was already up some 7 per cent last week to $2.20 after the US trade office signalled that fees for China vessels could be less punitive than initially expected.