Even though some book values appear unachievable, these stocks can narrow the P/B discount. Hongkong Land has moved from 0.3x P/B to 0.5x P/B because its management has a monetisation target and divested assets at book value.
A quick look through the 600-plus stocks listed on the Singapore Exchange shows many stocks trading below their book value. But there is book value and there is book value. The reason why some discounts are large is due to their illiquid balance sheets. As has been shown by the S-REITs with US commercial assets, a book value can be different from what the asset fetches on the market.
Take Manulife US REIT and Keppel Pacific Oak US REIT. These are in the accompanying table, trading at 0.37x price-to-book (P/B) ratio and 0.32x P/B as of Oct 2. How achievable are their book values?
