Singapore’s Straits Times Index kicks out Li Ka-shing’s port trust as US-China trade war crimps stock’s value by 84 per cent
- The market value of Hutchison Port Holdings Trust has plummeted by 84 per cent since its 2011 initial public offering
- That stock’s capitalisation at US$1.4 billion is the lowest among the 30 members of the Straits Times Index
Hutchison Port Holdings Trust will be removed from Singapore’s Straits Times Index after a dramatic fall in its market value amid rising global trade tensions, the index provider said in a statement.
The move marks the end of an era for the Li Ka-shing backed container port trust in Hong Kong, whose initial public offering in 2011 was among the biggest that year.
The market capitalisation has dropped 84 per cent since the IPO to around US$1.4 billion, the lowest among the 30 constituents of the Straits Times Index, according to data compiled by Bloomberg. The decline was accompanied by falling operating income since 2016 due to weakened trade demand.
Hong Kong, once the world’s busiest container port, has lost volumes to its neighbours in the last two decades and slipped in global rankings to seventh place last year, falling behind Shanghai, Singapore, Ningo, Shenzhen, Guangzhou and Busan.
The city has been handling fewer boxes every month since October 2017. A prolonged US-China trade war and one of the worst protests in Hong Kong since the 1997 handover mean the situation could worsen.
Shares in the container port trust fell as much as 1.3 per cent in Singapore on Friday, extending their decline this year to 37 per cent. That compares to a 2.7 per cent gain for the Straits Times Index.
