Monday, December 9, 2013

S-REITs - Not the time to bottom-fish yet (MKE)

S-REITs - Not the time to bottom-fish yet

Not the time to bottom-fish yet. The S-REITs sector has been a laggard in 2013 (-7.8% price return YTD), underperforming the STI by 6.4%. This is in stark contrast to its stellar performance in 2012 when the sector recorded a 41% price return and outperformed the STI by 20%. S-REITs currently trade at FY13F yields of 6.5% and FY14F yields of 6.7%, below their historical average of 7.0%. While the yields may seem attractive, we think it is too early to revisit the sector given the impending QE taper.

Entry point pegged at 7% yield. We would recommend investors to reconsider S-REITs when the sector average DPU yields touch 7% and above. This is pegged to a historical yield spread of 395bps and longer-term risk-free rate of 3.0-3.5% (currently 2.5%), and would imply further price downside of at least 8% for the whole sector.


Downgrade Industrial and Retail REITs. We are downgrading Industrial REITs to UNDERWEIGHT as asset prices have the most room to fall, given how much they have escalated over the past four years (+115%-153%) post GFC. We also downgrade Retail REITs to NEUTRAL given slowing consumption and most of the eligible malls in the REITs portfolio have already undergone asset enhancements, providing little boost to distributions.

Maintain UNDERWEIGHT. As a higher cost of borrowing and a lower asset value are being factored in, we revised our TPs across the board with the exception for CCT and KREIT. We raised our TPs for CCT and KREIT on higher office rental assumption (from our earlier conservative levels). On a segmental basis, our order of preference is retail REITs, followed by office, hospitality and then industrial. Our top pick is Suntec REIT which has forecasted DPU growth of 17.8% from 2013-2015, largely from the makeover of Suntec City, whereas other REITs have relatively underwhelming growth. We have a SELL on CACHE and MLT and a HOLD on A-REIT. Downside risk to our sector call stems from a prolonged delay in QE tapering, which will continue to stagnate the S-REITs market.


Source/Extract/Excerpts/来源/转贴/摘录: MKE-Research,
Publish date: 06/12/13

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Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
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