On March 17, Moody’s indicated that the local hospitality REITs have sufficient liquidity to cover their basic cash needs. In addition Ascott Residence Trust has a presence in China, Australia and the US where domestic travel is likely to recover at a faster clip than international travel. Frasers Hospitality Trust also has a large presence in Australia, Japan and UK, it adds.
Other hospitality plays include Mandarin Oriental, 78%-owned by the Jardine Group, and Far East Hospitality Trust.
SEE:Analysts positive on Far East Hospitality Trust, cites master lease income as buffer
Mandarin Oriental - recognisable by its fan - ended the week at US$1.77. It price is testing a resistance and a flat 100-day moving average at US$1.78. As it does this, its indicators have strengthened. However, its relatively low liquidity may prevent there from being any follow through. A successful breakout would provide the impetus for prices to test their Dec high of US$1.98. Support has been established at US$1.70 a level that coincides with the gradually rising 200-day moving average.
Far East Hospitality Trust which last traded at 62.5 cents has strengthened during the past two weeks, moving above the confluence of its 50- and 100-day moving averages, currently at 59 cents. Resistance appears at 66 cents. Quarterly momentum is attempting to move above a downtrend, its own moving average and its equilibrium line. If it manages to do this, prices should head higher to at least its resistance level.
CapitaLand Integrated Commercial Trust (CICT) retreated on Mar 19 after testing a high of $2.27 on Mar 18, but held above its 50-day moving average at $2.16 during its retreat. Stochastics continued to rise; ADX which fell to 10 has turned up, and the DIs remain positively placed. That may suggest that prices could well rebound towards $2.35 to $2.36 level.
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During the week of Mar 15-19, the Straits Times Index broke out of a two week very narrow sideways range of between 3,072 and 3,118, ending at 3,134, up 39 points week-on-week. This break - although not accompanied by volume confirmation - could send the STI on its way to the 3,368 to 3,377 region in the next few weeks. Quarterly momentum is testing the confluence of a resistance and its own moving average and needs a little nudge to break out of this range. The index’s long term indicators continue to rise and should be able to support the STI’s uptrend. Hence, overall, pressures should be upwards.
