Elsewhere, UOL Group’s chart pattern is in a consolidation range. The breakout level is at $8.70 or thereabouts. A successful breakout indicates an upside of around $10 based on the chart pattern. UOL’s NAV as of June 30 was $13.59. On Sept 10, UOL announced the divestment of strata units at Kinex for $375 million, above the book value of $370 million, proving that it can attain book value for its assets.
Just as indicators plunged to oversold lows by April with City Developments’ (CDL) RSI at just 20, indicators can move to overbought levels and stay there. CDL’s technical condition remains intact. RSI, at 71 as of Dec 19, isn’t particularly at extreme overbought levels. For instance, in Aug, RSI had risen above 82. In the meantime, ADX is neutral, and quarterly momentum rebounded off neutral levels at its equilibrium line in early December. These indicators suggest the continuation of the uptrend.
CDL’s ability to sell its non-core assets at above their book value proves to investors it is able to get full price for its assets. To further prove this point, CDL may decide to divest some of its UK properties - the site at Mortlake, the site at Teddington and Shoreditch at book value. This would prove CDL’s can divest at or above book. If so, CDL’s share price, in turn, should be able to attain its book net asset value of $10.10.
