Battersea project hit by unexpected losses, industrial stocks plummeted
(KUALA LUMPUR, 15th) Industrial stocks, which have been booming this year, have been overwhelmed by bad news today, and have declined almost across the board.
pursuant $SPSETIA (8664.BMS)$According to the results announced by Shida Group on Wednesday (14th), the loss of the British Battersea power plant project unexpectedly increased in the next quarter.
This led to the share, as well as another co-shareholder of the Battersea power plant project, Sunami Industries $SIMEPROP (5288.BMS)$It bore the brunt, with the biggest decline; in the end, the wave of arbitrage spread to overall industrial stocks.
The Battersea project is located in London and is a large-scale industrial project developed by Shida Group and the Senami Industrial and Employee Provident Fund (EPF).
At one point, Shida Group fell sharply by 26 cents, or 17.11%, to RM1.26, while the Morimei industry also shared the same situation, falling as low as RM1.29 in the intraday period, which is equivalent to a drop of 20 cents or 13.42%.
At the close of the market, Shida Group reported RM1.29, a decrease of 23 cents or 15.13%, the biggest drop in 16 years, with a single-day turnover of 0.1 billion42.23 million7,000 shares; Senami Industries reported RM1.31, down 18 cents, or 12.08%, with a turnover of 0.1 billion 0.12 million800 shares.
Take advantage of the opportunity to arbitrage
A fund manager, who did not wish to be named, told the financial media “The Edge” that the stock price of Shida Group had soared before, and it is understandable why various funds are now leaving the market for arbitrage.
If the market closes on Wednesday, Shida Group and Senami Industries have surged 44.76% and 138.40%, respectively, since last year.
Also, some investment banks downgraded Shida Group's rating today due to increased losses on the Battersea project, including Dahua Jixian.
Analysts at Dahua Jixian pointed out that the additional loss on the Battersea project was unexpected because the relevant factors were not mentioned in the Shida Group management's earlier predictions.
The industrial index fell sharply
Following the Malaysian Exchange Industrial Stock Index of 98 listed developers, it fell 35.53 points or 3.29% throughout the day, and the market closed at 1043.85 points. This is the worst performing area for Malaysian stocks today.
Other major industrial stocks with significant declines of more than 2% include IOI Real Estate $IOIPG (5249.BMS)$ , Shun Hung Ye $KSL (5038.BMS)$ and UEM sunshine $UEMS (5148.BMS)$ 。
IOI Real Estate closed at RM2.07, a decrease of 8 cents or 3.72%; Shunli Real Estate reported RM1.72, a decrease of 6 cents or 3.37%; UEM Sunshine reported RM1.01, a decrease of 3 cents or 2.89%.
Battersea's losses may be unstoppable
“The Battersea co-developer provided a rental income guarantee for the buyer of an office building, but after completion of the relevant building in April this year, it was unable to reach the net operating income level agreed between the two parties, causing losses for the next quarter.”
The analyst believes that these losses should continue until the relevant buildings reach the ideal occupancy rate.
Morinami Sangyo has yet to announce its latest quarterly results.
Source: Nanyang Siang Pao
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104995629 : hallo, nanyang, have you studied FA for SIMEPROP before you huha news on Battersea ? SIMEPROP business region is 99.95% in MY, just only 0.02% in UK....Your huha news caused panic sell in the market.
please google, ELMINA data project by SIMEPROP is in progress!
南洋商报 NYSP OP 104995629 : The Battersea Power Station site is owned by a consortium of Malaysian investors comprising PNB, Sime Darby Property, S P Setia and the Employees’ Provident Fund. The development management of the project is being undertaken by British based, Battersea Power Station Development Company.