Technically, UOL has yet to break out of a range. Resistance is at the twice tested $7.80–$7.90 range. Quarterly momentum is neutral and hovering around its equilibrium line. But it could easily rise. ADX has turned up from low levels and the DIs are positively placed. And the 50- and 100-day moving averages are drawing together. A successful break above $7.90 indicates an initial target of $8.50. Support is at $7.51, at the 50-day moving average which appears to be turning up. UIC itself continues to move progressively higher following its break above a thrice tested resistance and a multi-month base at $2.45, indicating an initial upside of $2.90.
UOL Group could benefit from a couple of recent developments. First off, if CapitaLand’s shareholders vote for privatising its development business, and to list CapitaLand Investment Managers (CLIM), it might be booted off the FTSE EPRA NAREIT Developed Index, which has only three developers. Analysts have already viewed City Developments (CDL) as a beneficiary although it has a host of problems. UOL Group, if deftly managed, could reap even more rewards.
For one, UOL is as underappreciated as its understated major shareholders, the Wee family. UOL subsidiary, United Industrial Corp holds a portfolio of office buildings that could experience a rebound in occupation following the announcement by the government that employees may return to work from April 5. In addition, UOL is trading at a higher discount to book than CDL. And of course it has the potential to carry a higher weight in the FTSE EPRA NAREIT Developed Index.
