The answer to the title may seem like stating the obvious, but on second glance, ownership is not that clear.
The main shareholder of City Developments is Hong Leong Investment Holdings (HLIH), as stated in its annual report. HLIH owns 48.55% of CDL, 45.5% of Hong Leong Finance and 75.1% of Hong Leong Asia .
HLIH in turn is owned by Davos Investment Holdings (33.6%), Kwek Holdings (29.1%), and individuals from the broader Quek and Kwek clans (37.3%). Davos, whose address is Guoco Tower, is likely controlled by Quek Leng Chan and his family, and the largest shareholder as at FY2023 is Kwek Leng Kee, a brother. Guoco Group, controlled by Quek Leng Chan, famously sold Dao Heng Bank to DBS Bank in 2002 for $10 billion. Quek Leng Chan’s main listed entity in Singapore is GuocoLand .
Kwek Holdings is controlled by Kwek Leng Beng, with Sherman Kwek holding some shares, along with his cousins Kwek Eik Sheng and Brian Kwek. Brother Kingston is not a shareholder.
Market observers have indicated that should there be hostile parties within the clan, whoever controls HLIH would control CDL, HL Finance and HL Asia.
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Analysts are beginning to estimate the likely break-up value of CDL. The group adopts historical cost accounting, but in the past two to three years it has been reporting its book NAV and a revalued NAV based on fair value. It is also doing likewise with its gearing, which, based on its reporting standard, was 117% as of Dec 31, 2024.
One indicator is going in CDL’s favour is interest rates. US risk-free rates have eased significantly. The 10-year US treasury yield, which is the market’s risk-free rate, is at its lowest level this year at 4.2406, a tad below its 200-day moving average at 4.2419. This level is likely to act as a support, and the 10-year US treasury yield is likely to rebound from current levels.
See also: This stock is a direct beneficiary of the Singapore stock market’s revival
Despite the weakness of risk-free rates - an indication that inflationary fears may have receded - the local FTSE REIT Index is near a one-year low, a three-year low and a five-year low. Short-term indicators are nearing the low end of their range, suggesting that a rebound should materialise.
Market participants in the Singapore market experienced the worst of both worlds on Feb 28. Bank shares fell because lower risk-free rates suggest softer interest rates but the S-REITs did not rebound. On the other hand, the FTSE REIT Index didn’t fall much, an indication that downward momentum has dissipated from a medium-term perspective.
As market watchers wait for the FTSE REIT Index to recover, they may also be calculating CDL’s break-up value. That’s all very well but some astute investors are wondering if Quek Leng Chan is likely to get there ahead of the rest. As at Dec 31, 2024, book NAV was $10.12.
FTSE REIT Index
