Keppel DC REIT (SGX: AJBU) share price to hit $4?

My last coverage on Keppel DC REIT (AJBU) share price was on 7 February 2020. Back then, the counter was on a mighty form, surging from $2.00 to $2.33. Then, the 20 March market rout sent Keppel DC REIT (AJBU) share price tumbling to a low of $1.90. Thereafter, the share price steadily climbed to a high of $3.00 in October 2020 but unexpectedly tapered off to $2.70 toward the end of the year.

The beginning of 2021 saw Keppel DC REIT (AJBU) share price resuming its bullish form. However, the splendid run was recently halted by the devastating technology stocks sell-offs by the big boys. The massive US$1.9 trillion stimulus package by the US government led to a so-called rotation among institutional investors into valued stocks which had been walloped by coronavirus in 2020.

Keppel DC REIT AJBU share price

The volatility of Keppel DC REIT (AJBU) share price may have caused some concerns among investors. Being part of the prestigious Straits Times Index (STI), has the blue chip really lost its shine? Apparently, a member of SG Wealth Builder is concerned enough to seek my insights on Keppel DC REIT (AJBU) share price.

To put things into perspective, this is not the first time that Keppel DC REIT (AJBU) share price went into the correction territory. Despite being an S-REIT, institutional investors view this counter as a technology stock. Thus, when NASDAQ plunged in October 2020, Keppel DC REIT (AJBU) share price fell from $3.00 to $2.70 back then. This time round, I expect the counter to suffer the same fate.

In my blog, I have always stressed that what goes up must surely come down. The spectacular rise of Keppel DC REIT (AJBU) share price, partly driven by the digitization shift among companies, was simply not sustainable. What this means is that the recent correction is healthy and represents good opportunity for accumulation. In my view, the fear of inflation has been overblown. I do not think that the Us stimulus will cause the market to overheat and leads to interest rate hikes in the short term.

The recent drop in Keppel DC REIT (AJBU) share price was largely attributed to the broad market sentiments on the valuations of technology stocks. And we all know that short-term market sentiments can be irrational at times. Looking at the financial statements, I don’t see any specific developments that could cause harm to the unit price in the long run. Based on the $0.0917 full-year DPU of FY2020, the distribution yield is about 3.6% (at the point of writing), which is quite decent in my point of view.

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 in Keppel DC REIT (AJBU) share currently. Whether Keppel DC REIT (AJBU) 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.

 Keppel DC REIT (AJBU) share price on the rise

It is only a matter of time, and not if, that Keppel DC REIT (AJBU) share price recover from the recent slump. After all, the Group has achieved total unitholder returns of 38.4% for FY2020, and 311.6% since listing as at 31 December 2020. Under the operating climate for the past two years, the management can [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: March 14, 2021 — 9:42 pm

3 Comments

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  1. Thanks, Gerald. Drop below 2.6 was long overdue before this correction.

  2. Hi Leo,

    Indeed! This counter has been bullish for too long due to its popularity among retail investors.

    Regards,
    Gerald
    https://sgwealthbuilder.com

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