Are local racists leaving money on the table in the stock market?

 

It's understandable why the government is concerned about local racism. Some hurtful comments were made about ethnic Indian Singaporeans in response to the disaster in Nepal. I'm another case: criticism of Singapore's investments in Air India attracted another round of racist comments about Indians in general. 

As an investor, I think we should not politicize a company's business decisions. 

• If you believe that SIA can turn around Air India's fortunes, then you should buy the stock. 
• If you are indifferent like me, stay out of the SIA share market. 
• If you are super-confident that SIA would lose money, then muster the courage to short the counter instead of politicizing this issue. 

India has a rising middle class and superb GD growth, and this should get some investors excited.

Today, I want to ask a provocative question. 

Are local racists leaving too much money on the table in the markets? 

And to illustrate this further, I drew a scatterplot of all the stocks in my portfolio, plotting Return on Equity (ROE) against the Price-to-Book Ratio (PB), using data from Yahoo Finance. Then I fit a least-squares regression line through the data points. Points furthest above the line may indicate drastic undervaluation.

So the most undervalued stock is Laopu Gold, which will be the subject of a future blog article an it;s my latest acquisition.

But note that a close second is CapitaLand India Trust, which, in my opinion, has superb performance at a steep discount to its market price.

I did further research by invoking a quick stock research skill I built into my Claude Co-work, and this is what it had to say:

Stock Name: CapitaLand India Trust

Ticker: CY6U.SI

Current Price: SGD 0.950

Analyst Target Price: SGD 1.33

Fundamentals: PE Ratio - 4.7 | PB Ratio - 0.77 | Current Yield - 9.8% (8.3% run-rate — a 1.44c advanced distribution put three payouts in the trailing window) | ROE - 15.3% | RSI 180 days - 46.8 |

Business: A Singapore-listed business trust owning Indian real estate — 22.0 million square feet of completed IT business parks, industrial and logistics facilities, and data centers across Bangalore, Chennai, Hyderabad, Pune, and Mumbai.

Revenue Source: 1H 2026 total property income of S$137.6 million (INR 9,923 million) is almost entirely rent from IT business park tenants, with a growing data center and industrial slice, supplemented by interest on S$417.9 million of receivables from six forward-purchase development assets.

SWOT Analysis: 

Strengths - Net property income margin widened to 78.1% from 76.1%, driven by 24% positive rental reversions and 91% committed occupancy, lifting distributable income by 8% to S$64.2 million, while the Navi Mumbai data center Tower 1 was fully leased and handed over to a hyperscaler in July, with full income from August. 

Weaknesses - The rupee fell 12% against the Singapore dollar, converting 13% DPU growth in INR into just 1% in the currency in which unit holders are actually paid, and only 53% of borrowings are hedged back into INR. 

Opportunities - There is 4.9 million square feet of development potential inside the existing IT parks plus 6.4 million square feet across the forward-purchase pipeline, funded from S$1.1 billion of debt headroom, with a July INR 5.5 billion drawdown alone expected to add 1.6% to DPU. 

Threats - Gearing of 38.0% is at the high end for an SGX-listed trust, and with 25.5% of borrowings floating, Indian rate moves hit distributions quickly — the units already sit at their 52-week low of S$0.95, down from a S$1.28 high.

Typical Dividend Months: March and September

From this quick examination, I can conclude that everything under management's control has been decent, with high rental reversions. But the PE ratio is single-digit, and dividend yields are close to 10%. But everything seems to be ruined by movements in the Indian Rupee. But even though analysts have a high target price, the REIT's six-month momentum is negative.

Of course, this doesn't mean there's actual racism behind such low valuations, but I think the weakening Rupee would still make this REIT a tempting buy.

At this point, I already own this REIT. It's generated some capital losses, but after accounting for dividends received, I'm still up on my purchase price.

Same rules apply.

If you think the Rupee's weakness could push the REIT lower, then stay out of the markets. 

But if you believe that there's somehow a thin veneer of racism that is similar to what you've noticed in social media comments about SIA, and it's a reason for this discount, then you may want to risk some capital to see if you are correct.