Wharf Real Estate (1997.HK): Under Pressure Below HK$31.90

The Hong Kong local property stock is one of the weakest sectors in the Hang Seng Index as Hong Kong is suffering the third wave of coronavirus. Wharf Real Estate (1997.HK) was trading around the 52-week low, but the Hang Seng Index rebound around 15% from March low.

Downtrend 4

The Hong Kong local property stock is one of the weakest sectors in the Hang Seng Index as Hong Kong is suffering the third wave of coronavirus. Wharf Real Estate (1997.HK) was trading around the 52-week low, but the Hang Seng Index rebound around 15% from March low.

Hong Kong's retail sales dropped 24.8% on year in June (vs -24.0% expected, -32.9% in May), according to the government. The gloomy retail sales outlook could affect the leasing income and the valuation of the property for the company.

Recently, Wharf Real Estate, a Hong Kong based REIT, posted 1H net income down 26% on year to 3.84 billion Hong Kong dollars. The company declared an interim dividend of 0.78 Hong Kong dollars per share, down from 1.10 Hong Kong dollars in the prior-year period.

From a technical point of view, the stock retreated from HK$39.05 and returned the level around the 52-week low. 

Besides, the death cross between 20-day and 50-day moving averages has been identified, suggesting a bearish signal.

The RSI is below its oversold level at 30, but has not displayed any reversal signal.

Bearish readers could place the nearest resistance level at HK$31.90 (38.2% retracement), while the support levels would be located at HK$27.90 and HK$22.80 (138.2% expansion).


Source: GAIN Capital, TradingView.

More from Equities

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.