Apart from market uncertainty resulting from the COVID-19 pandemic, we believe that MUST’s weakened unit price is also due to exit of index funds and the hot topic of WFH.
Upon inclusion in the FTSE EPRA Nareit Index in December 2019, a huge inflow of index and global funds entered MUST’s register, bringing its share price to a high of US$1.00 as at 31 December 2019 (year-on-year increase of approx. 30%). Amid current market uncertainty, many of the index have reduced their holdings. However, we believe that once market conditions improve, the same funds will return with a vengeance potentially causing a re-rating of MUST.
Another qualitative view is that, post COVID, workers may not be returning to office and Work From Home may have an impact on office space. This is an on-going hot topic with 2 huge schools of thought. On the other hand, there are others who believe office will remain relevant as humans are social creatures. There is a need for greater collaboration and I’m not sure how much longer I can keep my sanity working in my room for the last 6 mths. However in US, WFH has been around for more than 30years and more than 50% of workers already have an option to WFH. In Manulife North America, 30% of our colleagues already WFH pre-COVID. Recent surverys show that only an incrementa of 2% prefer to WFH during COVID. Hot-desking in US has been extremely popular but that may have to go when workers return to office as part of the social distancing measures.
In short, due to the extreme views on this, this could be another reason why the price has been in ‘no man’s land’ for the past weeks.
Apart from market uncertainty resulting from the COVID-19 pandemic, we believe that MUST’s weakened unit price is also due to exit of index funds and the hot topic of WFH.
Upon inclusion in the FTSE EPRA Nareit Index in December 2019, a huge inflow of index and global funds entered MUST’s register, bringing its share price to a high of US$1.00 as at 31 December 2019 (year-on-year increase of approx. 30%). Amid current market uncertainty, many of the index have reduced their holdings. However, we believe that once market conditions improve, the same funds will return with a vengeance potentially causing a re-rating of MUST.
Another qualitative view is that, post COVID, workers may not be returning to office and Work From Home may have an impact on office space. This is an on-going hot topic with 2 huge schools of thought. On the other hand, there are others who believe office will remain relevant as humans are social creatures. There is a need for greater collaboration and I’m not sure how much longer I can keep my sanity working in my room for the last 6 mths. However in US, WFH has been around for more than 30years and more than 50% of workers already have an option to WFH. In Manulife North America, 30% of our colleagues already WFH pre-COVID. Recent surverys show that only an incrementa of 2% prefer to WFH during COVID. Hot-desking in US has been extremely popular but that may have to go when workers return to office as part of the social distancing measures.
In short, due to the extreme views on this, this could be another reason why the price has been in ‘no man’s land’ for the past weeks.