KUALA LUMPUR, Jan 7 (Bernama) -- Bursa Malaysia’s benchmark index rebounded from earlier losses to close at its intraday high on Wednesday, gaining 0.27 per cent in late trading as buying interest returned to selected heavyweights. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 4.48 points to 1,676.83 from Tuesday’s close of 1,672.35. The benchmark index opened 0.88 of-a-point lower at 1,671.47 and subsequently hit a low of 1,665.94 during the mid-morning session before gaining momentum toward closing. On the broader market, losers led gainers by 565 to 512, while some 526 counters were unchanged, 1,046 untraded, and 10 suspended. Turnover improved to 2.73 billion units worth RM2.76 billion versus Tuesday’s 2.66 billion units worth RM2.76 billion. Dealers said that investors were cautious following geopolitical developments in Asia.
IGB REIT’s impressive 22% surge this year has prompted analysts to downgrade the REIT to a 'hold' rating, despite slightly higher fair value targets for the Mid Valley Megamall and The Gardens Mall operator.
AmInvest and Maybank Investment Bank (Maybank IB) highlighted that IGB REIT’s valuation now appears stretched compared to peers like Sunway REIT and Pavilion REIT. The unit price of IGB REIT, currently trading at nearly two times net asset value (NAV), contrasts with competitors hovering just over one time NAV.
“We see limited upside potential after the stock’s strong rally," Maybank IB said, noting that they had not factored in potential new assets into their forecasts. Both firms anticipate IGB REIT’s next growth catalyst will be the acquisition of Mid Valley Southkey Mall in Johor Bahru, a fully occupied property expected to see rental renewals in 2025.
AmInvest raised its fair value to RM2.28 from RM2.11, citing lower cost of capital assumptions, while Maybank IB bumped its target price to RM2.22 from RM2.15 after adjusting its valuation years.
Despite the strong rental income growth from Mid Valley Megamall and The Gardens Mall—with average gross monthly rental rising 13.5% and 1.4% year-on-year, respectively—analysts feel the REIT’s rally has peaked for now. On Tuesday, IGB REIT units dropped 3.21% to close at RM2.11, valuing the REIT at RM7.62 billion, with a historical dividend yield of 4.96%.
Comments
Post a Comment