Suntec REIT has been consolidating below 1.75 resistance level since June last year forming a Bullish Double bottom with support at the 1.50 as of today. Can watch list this counter for more upside if the CRITICAL resistance at 1.75 breaks out, if that happens, we may see it trade higher to 2.00 eventually. Possible to accumulate before breakout also but would have to hold in wait for it (who knows when ?). Consistently supported above the 1.50 level which also coincides with the 200 DAY Long term MA which signals that long term uptrend still pretty much intact.
Stop loss at 1.72 on breakout.
OCBC - 20 March 2014
Suntec REIT: Cash call for strength and growth
Suntec REIT announced yesterday that it will be issuing 218.1m new units at S$1.605 apiece via a private placement. The move came as a surprise to us as Suntec REIT had explicitly expressed that it has sufficient resources to fund its growth plans just a quarter ago, and that it was trading at a 21% discount to book value. According to management, the current intention is to use the proceeds to repay its existing debt, which is likely to reduce its debt burden and aggregate leverage. However, given the change in stance, we believe that Suntec REIT may possibly be beefing up its financial strength for potential growth opportunities in the near term. We maintain BUY with a revised fair value of S$1.85 (S$1.90 previously) on Suntec REIT.
Suntec REIT announced yesterday that it will be issuing 218.1m new units at S$1.605 apiece via a private placement. The move came as a surprise to us as Suntec REIT had explicitly expressed that it has sufficient resources to fund its growth plans just a quarter ago, and that it was trading at a 21% discount to book value. According to management, the current intention is to use the proceeds to repay its existing debt, which is likely to reduce its debt burden and aggregate leverage. However, given the change in stance, we believe that Suntec REIT may possibly be beefing up its financial strength for potential growth opportunities in the near term. We maintain BUY with a revised fair value of S$1.85 (S$1.90 previously) on Suntec REIT.
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