Dear readers, one of the most recent Singapore stock-related headlines is about the privatisation of Capitaland stock. Or it may not be really called as such. For Capitaland is to privatise its real estate development business while spinning off its REITs and investment management unit into a separate listed Singapore entity called CapitaLand Investment Management (CLIM). Capitaland shareholders will also get some shares in CLIM stock through some form of conversion.
Judging from what I have read, the management of Capitaland seems to be confident that CLIM will unlock even more value for shareholders. And some analysts interviewed also shared the view to the effect the CLIM may provide shareholders with opportunity for capital appreciation. Especially since CLIM is expected to become Asia’s largest Real Estate Investment Manager.
Yes, capital appreciation even so when Capitaland stock has traded between $2 to slightly more than $4 a share for a really long time from 2008 all the way to 2021 (right now! And closing price yesterday was $3.75). There was a time when Capitaland stock trade at more than $7 but that was in 2007, many years back. So for long-term investors of Capitaland, this news of listing of CLIM may prove to be welcoming as it could provide the said more room of capital appreciation for investors.
But I will really like to share my view that for investors who are long-term, the very fact of them being long-term investors of Capitaland is that they like just what Capitaland stock is: slow and steady, hence they have been invested in Capitaland all these years and they are not looking for any growth or growing stock. In fact if so, they will not have stay invested in Capitaland stock for so long! Given what I shared above, I think there will be a camp of long-term Capitaland investors who may not be as welcoming to the restructuring of Capitaland since they like what Capitaland is and has always been as a stock to them.
I am not vested in Capitaland stock. But if I am a shareholder of Capitaland, I will much prefer Capitaland effect a clean-cut privatisation of Capitaland stock at a price which provides investors with a good profitable premium. This will reward long-term stalwarts of Capitaland stock and without converting any of their original investment into an investment which they may not want to invest at all.
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