Bukit Sembawang Estates, a 105-year-old company, has hit an all-time high stock price in one year. From S$4.64 to S$5.12 in one year and a hike of almost 10% in less than a week shows that there has to be some great news or remarkable change seen within the organization. The trading value increased from 10,000 shares a day to 300,000 in three days. The real estate company is run conservatively by a debt-free residential property developer and is partly owned by Lee family, OCBC’s founding.
Bukit Sembawang Stock Prices
Technically, this is a rare situation for real estate industry and shows overbought territory. Some of the probable reasons can be discussed.
Reasons behind the all-time high stock price of Bukit Sembawang Estates
1. Paying out high dividend
One of the reasons behind this unusual high stock price could be the announcement of the company regarding paying out a dividend of 33 Singapore cents a share next month. The dividend is going to give a profit of 6.5 percent.
2. News of merging and achievements
The second reason could be the rumours of merging and achievements. The Lee family has divested its company in past with Fraser and Neave (F&N) and Asia Pacific Breweries (APB) in 2012. These are the best examples to quote here. In the depressed market of real estate industry, it seems some speculators have emerged. Privatizing property saves developers from paying heavy penalties on properties which remain unsold for a span of two years. This strategy is useful after the developer has the Temporary Occupation Permits or TOP. The 85-unit freehold Orchard Road Development, Paterson Collection of Bukit Sembawang obtained its last TOP in October 2015 and they did not launch the project till July 2016.
Bukit Sembawang Developer for Saint Thomas Walk Condo
3. Bulk sale news gave the stock price a boost
The third reason is that Bukit Sembawang has effectively solved the issue from its legacy agricultural land, which they could not use to build houses previously. If the past records of the company would be checked, you would know that they are having a prolonged dispute with Singapore Land Authority. However, with its legacy holdings, Bukit Sembawang has been a valuable Singapore property stocks preferred usually by patient investors who are looking for long time return on their investment.
Bukit Sembawang Enbloc Condo
The recent update on its agricultural site has certainly offered a valuable boost to Bukit Sembawang. It is expected to help the company overcome its losses from its unsold properties along with the penalties and discount offers given. Since the value of the firm is awaiting release, valuing the upside of the firm at present would be tricky. The investors who are curious about the company’s plans will have to wait for the company’s annual meeting. Since there is a subdued growth in Singapore right now, the investors would, probably, need some time to figure out the real truth behind everything.