CapitaLand share price plunged 11% within a month

Has CapitaLand share price bottomed? October had been a terrifying month for CapitaLand share price as the counter crashed 11%, falling from $2.80 to a low of $2.50. What has led to the turbulence for CapitaLand share price?

In my point of view, the bearish form of CapitaLand share price could be attributed to more of a combination of factors than a sole underlying problem. The build-up to the US Presidential Election had led to a very volatile stock market in October. Most of the Straits Times Index (STI) components suffered carnage and CapitaLand share price was no exception.

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The second factor that punctured the form of CapitaLand share price could be the fallout from COVID-19 pandemic. Data revealed that many of its malls were still giving rental waivers to tenants in 3QFY2020. For example, Raffles City reported lower revenue and net property income mainly due to grant of $15.2 million rent waivers to tenants. 4 November will be destiny day for CapitaLand share price as the Group will report the third quarter update.

The third factor for the explosive meltdown of CapitaLand share price could be the works of the short-sellers. The month of October saw short-selling volume surging for this counter. The week of 26 – 30 October saw shot selling volume hitting a high of 20 million shares. In the process, CapitaLand share price inevitably got walloped upside down.

WeekVolumeValue
7 -11 September3.9 million$10.6million
14 – 18 September3.1 million$8.4 million
21 – 25 September10.3 million$27.6 million
28 Sept – 2 Oct6.8 million$18 million
5 – 9 October5.4 million$15 million
10 -12 October6.8 million$19 million
19 – 23 October8.2 million$22.4 million
26 – 30 October20 million$52 million

Despite the volatility of CapitaLand share price, I have always maintained that this counter is a blue-chip that investors should adopt a buy-and-hold strategy, rather than a hit-and-run approach. What this means is that you must have a long-term mentality for this stock and set appropriate entry and exit targets.

In this article. I will share my insights on the investment merits on CapitaLand. Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in CapitaLand before. Whether CapitaLand share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

CapitaLand share price bottomed?

To be successful in stocks, investors must be able to stomach short-term volatility and buy low and sell high. This means that one should buy shares of companies that are selling at distressed levels. With a Price/Book Value of just 0.52, CapitaLand share price is being traded at 50% discount to its book value.

Indeed, if investors look back many years down the road, they would likely to reflect that this is a rare opportunity to buy CapitaLand stock. For the past three years, CapitaLand share price had [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: November 3, 2020 — 4:56 pm

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