S'pore's UK-linked firms shrug off poll results

1 St Martin’s Le Grand, a freehold property in the heart of London, owned by property developer Ho Bee Land.
1 St Martin’s Le Grand, a freehold property in the heart of London, owned by property developer Ho Bee Land. PHOTO: HO BEE LAND

Investors holding stocks of several Singapore companies with operations in Britain mostly shrugged off the shock election outcome yesterday, after some share prices slipped in early trade.

Some property firms and hospitality real estate investment trusts (Reits) lost ground in morning trade as investors digested the hung-Parliament result.

Ho Bee Land, which has five commercial properties in London, lost five cents before closing just two cents lower at $2.37 yesterday. Responding to a Straits Times (ST) query, the firm said it is in a good position to ride out any uncertainties during this period as all its office assets in London are almost fully occupied. It added that the bulk of its loans for the investments are in pounds, and "this natural hedge mitigates our currency risks".

The pound slid about 1.5 per cent against the greenback to US$1.2743 from US$1.2942 on Thursday, as the result shook markets.

Developer CapitaLand, with a presence in Britain via its serviced residence arm The Ascott, closed two cents lower at $3.60. "We hold a long-term view of our presence in the UK... We continue to see growth potential for our serviced residences that cater to both corporate and leisure travellers," said The Ascott managing director for Europe Alfred Ong. Ascott Reit closed unchanged at $1.145 yesterday.

Frasers Hospitality Trust (FHT), with six assets in Britain, ended one cent higher at $0.72. FHT's trust managers told ST that those properties contribute less than 15 per cent to the Reit's net property income. "We have fully hedged our foreign-sourced income to mitigate foreign exchange volatility," said Ms Eu Chin Fen, chief executive of the FHT managers.

Several stocks bucked the down trend from the opening: ComfortDelGro - a major transport operator in London - rose one cent to $2.41, and City Developments (CDL) rose 12 cents to $10.88 yesterday morning. CDL continued to rise, closing at $10.95.

Hong Leong Group, the parent of CDL and London-listed Millennium & Copthorne Hotels, said it is still confident of the long-term fundamentals of the British economy.

"CDL's strategy of targeting predominantly UK nationals for its residential developments in London and its management of foreign exchange exposure... insulate the group from the potential impact of the UK's impending exit from the EU," said a Hong Leong spokesman.

 
A version of this article appeared in the print edition of The Straits Times on June 10, 2017, with the headline 'S'pore's UK-linked firms shrug off poll results'. Print Edition | Subscribe