Market News & Analysis

Top Story

Link REIT Issues a Profit Warning

Link REIT (823), a real estate investment trust, announced that the company would expect a loss in full year results ending March 31 due to the decline in the valuation of the properties and the establishment of a support scheme and multi-prolonged measures to support tenants. The company said: "the appraised value of our investment properties is expected to be 193.2 billion Hong Kong dollars as at 31 March 2020 (a decline of 12.3% when compared to the appraised value of 220.4 billion Hong Kong dollars as at 30 September 2019).

Besides, Hong Kong's 1Q GDP sank 8.9% on year (-6.5% expected), the largest decline in record, according to the government. The gloomy economic activity could affect Link REIT as the portfolio of Link REIT focuses on the Hong Kong market.

From a technical point of view, the stock remains capped by a declining trend line drawn from January top on a daily chart. The declining 50-day moving average is also acting as resistance. The RSI also failed to penetrate the previous high at 54, suggesting the lack of upward momentum for the prices. As long as the previous high at $71.25 is not surpassed, the stock could consider another down leg to the previous bottom at $62.65 and the 127.2 retracement level at $60.30.

In an alternative scenario, a break above the previous high at $71.25 would suggest the bullish breakout of the declining trend line and trigger a rebound to next resistance level at $75.25.



Source: GAIN Capital, TradingView
Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.