UOB Kay Hian has added Lendlease Global Commercial REIT (LREIT) to its alpha picks portfolio on Sept 3 after the portfolio “handily beat” the performance of the Straits Times Index (STI) in the month of August.
During the month, UOB Kay Hian’s alpha picks portfolio rose 0.9% m-o-m on an equal-weight basis, surpassing the STI’s performance, which declined 3.5% m-o-m.
That said, the outperformance was due to a range of stocks that only comprised one-third of the portfolio seeing positive share price increases m-o-m.
“On price and market cap basis, Sea materially skewed the results due to its oversized market cap relative to the rest of the portfolio. In August, a narrow range of stocks did well, including Sea (+22.5% m-o-m), Yangzijiang or YZJ (+19.7% m-o-m) and UMS (+8.1% m-o-m),” writes the Singapore research team in a Sept 3 report.
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For September, the team has removed Ascendas REIT (A-REIT) from its portfolio and replaced it with LREIT due to the latter’s growth profile.
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Key catalysts to LREIT’s share price include the redevelopment of the Grange Road car park, as well as the acquisition of Jem, say analyst Jonathan Koh.
Koh has kept “buy” on LREIT with an unchanged target price of $1.01.
In addition, the team has removed SGX due to the launch of the MSCI China A50 Connect Index by the Hong Kong Stock Exchange (HKEX). The team also estimates SGX to bring in lower treasury income in the months moving forward.
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Finally, Hong Leong Asia has been removed from UOB Kay Hian’s alpha picks portfolio due to its “challenging outlook for 2HFY2021” and lack of catalysts for the near-term.
Photo: Bloomberg
