Hyprop Investments Limited (JSE: HYP) stands as a pivotal player in the real estate sector, navigating through a landscape of challenges and opportunities.
Over recent years, the company weathered losses in its share price, a testament to the complexities within the market. Despite facing headwinds, Hyprop’s recent half-year results paint a nuanced picture. While the company showcased resilience, outperforming on certain metrics, it grappled with setbacks in other areas compared to the previous year.
Distributable income, a crucial measure, witnessed an 8.3% decline to R668 million, attributed to higher interest rates and foreign exchange losses in Nigeria. However, amidst these challenges, Hyprop maintains robust liquidity, boasting R1.6 billion in cash and R1.7 billion in available bank facilities. Additionally, positive indicators emerged across its South African and European operations, with notable increases in asset valuations, tenant turnover, trading density, and foot count. Despite the resilience displayed, Hyprop anticipates a further reduction in distributable income per share for the fiscal year ending 30 June 2024, signalling a cautious outlook amid evolving market dynamics.
Technical
Currently riding an uptrend, Hyprop’s stock exhibits strength, residing comfortably above its 100-day moving average within an ascending channel pattern.
Notably, a robust support level materialised at R25.27 per share, bolstered by heightened buying activity, fuelling a surge in the share price. However, the rally encountered resistance at R33.50 per share, where overbought RSI conditions posed a formidable challenge to the upward momentum. Subsequently, intensified selling pressures prompted a downturn, with the share price retracing towards the lower boundary of the ascending channel, coinciding with the 100-day moving average and the 50% Fibonacci Retracement level.
The future trajectory of Hyprop’s share price hinges on pivotal junctures. Should selling pressures persist, a high volume breakdown below the pattern and 50% level could catalyse further downside potential, with the 61.80% Golden Ratio emerging as the next point of interest to the downside. Conversely, a resurgence in bullish momentum could signal a bullish reversal, potentially leading to a retest of the R33.50 per share resistance level.
Summary
Hyprop Investments Limited faces a nuanced landscape, balancing resilience amidst earnings challenges. Positive indicators in asset valuations and operational metrics offer promise, yet caution prevails with anticipated income reduction. Technical analysis suggests pivotal support at R25.27 per share and resistance at R33.50, guiding the share price trajectory amid challenging market dynamics.
Sources: Hyprop Investments Limited, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.
