Mapletree Commercial Trust (MCT SP) BUY
- Hong Kong has relaxed social distancing measures. Gyms, beauty salons, massage parlours, religious places, libraries and sport venues will reopen with groups capped at four people starting 21 Apr 22. Face-to-face classes at kindergartens, primary schools and international schools would resume on 19 Apr 22. Operating hours for restaurants to offer dine-in service will be extended from 6pm to 10pm. The current onerous 14-day quarantine would be lowered to seven days conditional upon negative rapid test results on both the 6th and 7th days of hotel quarantine. The authorities plan to designate more hotels as quarantine facilities to cope with the anticipated increase in volume of travellers. The ban on flights from nine countries, namely Australia, Canada, France, India, Nepal, Pakistan, the Philippines, UK and the US, would be lifted from 1 Apr 22.
- Positive implications for merger with MNACT and recovery at Festival Walk. The abrupt u-turn from a draconian zero tolerance COVID-19 strategy is a positive surprise. The reopening of the Hong Kong economy will generate improvement in shopper traffic and tenant sales at MNACT’s Festival Walk. From MCT’s perspective, it strengthens the rationale for the merger with MNACT, who will benefit from recovery at Festival Walk.