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India Equity Research Reports, IPO and Stock News
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We swap our preference for WDC with SGP: SGP’s 25% discount to
NTA and 8.6x P/E looks quite compelling and the buy-back program
announced in August will provide a positive impetus to SGP’s stock
price, in our view. In comparison, WDC no longer looks attractive to us
in relative valuations terms, particularly on a risk-adjusted basis. We
replace WDC with SGP in our relative value idea – ‘prefer WDC over
DXS’ (-2.6% from Jul 08, 2011; benchmark -20.7%).
‘Prefer WRT over CFX’: We close our idea – ‘prefer WRT over GPT’
(-9.2% from Jul 08, 2011; benchmark -20.7%), as the combination has
not worked out in the manner we expected them to. However, WRT is
still one of our top picks among A-REITs, and we recommend a
preference for WRT (26% disc to NTA; low interest costs) over CFX
(20% disc to NTA; risks from increasing interest rates and rising
occupancy costs for retailers) based on relative valuations and risks.
Global headwinds are prompting earnings downgrades: The regional
benchmark FTSE E/N Asia Index is near its two-year low now on
regional inflation concerns, policy overhang and eurozone credit crisis.
The recent worldwide growth estimate cuts and lower hiring expectations
have prompted several earnings and ratings downgrades across the
region. On these grounds, we close our idea - 'prefer SP Setia over
KLPRP Index' (+3.1% since Jul 21, 2011; benchmark -18.6%). Given the
recent volatility in global markets, we expect divergence in valuations of
low-beta and high-beta stocks to widen further going forward and
recommend active stock selection to achieve positive returns.
Asia real estate relative value ideas
Prefer Entry price Over Entry price Entry date Time horizon
Global Logistic Props S$ 2.12 FSTREH Index 750.9 27 Jan 11 9 months
CapitaLand S$ 3.65 Keppel Land S$ 4.64 27 Jan 11 9 months
Asian Property Dev. Bt 5.33 SETPROP Index 152.3 5-Apr-11 6 months
FTSE E/N Asia Index 1580.76 HSCIPC Index 3205.26 5-Apr-11 6 months
Cheung Kong HK$ 125.5 Henderson Land HK$ 53.15 26-Apr-11 6 months
Mitsui Fudosan (8801) ¥ 1336 TSE REIT Index 1054.3 24-May-11 3 months
CapitaMalls Asia S$ 1.46 Hang Lung Props HK$ 31.25 28-Jun-11 6 months
Agung Podomoro Ld IDR 365 Ciputra Dev. IDR 530 21-Jul-11 3 months
DLF Ltd INR 241.25 Godrej Properties INR 803 21-Jul-11 3 months
Stockland A$ 2.73 DEXUS Prop A$ 0.795 23-Sep-11 3 months
Westfield Retail Group A$ 2.38 CFS Retail Prop A$ 1.68 23-Sep-11 3 months
Source: Bloomberg, J.P. Morgan for stated preference. Note: Additional information available on request. Prices are stock-split and
stock-dividend adjusted.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We swap our preference for WDC with SGP: SGP’s 25% discount to
NTA and 8.6x P/E looks quite compelling and the buy-back program
announced in August will provide a positive impetus to SGP’s stock
price, in our view. In comparison, WDC no longer looks attractive to us
in relative valuations terms, particularly on a risk-adjusted basis. We
replace WDC with SGP in our relative value idea – ‘prefer WDC over
DXS’ (-2.6% from Jul 08, 2011; benchmark -20.7%).
‘Prefer WRT over CFX’: We close our idea – ‘prefer WRT over GPT’
(-9.2% from Jul 08, 2011; benchmark -20.7%), as the combination has
not worked out in the manner we expected them to. However, WRT is
still one of our top picks among A-REITs, and we recommend a
preference for WRT (26% disc to NTA; low interest costs) over CFX
(20% disc to NTA; risks from increasing interest rates and rising
occupancy costs for retailers) based on relative valuations and risks.
Global headwinds are prompting earnings downgrades: The regional
benchmark FTSE E/N Asia Index is near its two-year low now on
regional inflation concerns, policy overhang and eurozone credit crisis.
The recent worldwide growth estimate cuts and lower hiring expectations
have prompted several earnings and ratings downgrades across the
region. On these grounds, we close our idea - 'prefer SP Setia over
KLPRP Index' (+3.1% since Jul 21, 2011; benchmark -18.6%). Given the
recent volatility in global markets, we expect divergence in valuations of
low-beta and high-beta stocks to widen further going forward and
recommend active stock selection to achieve positive returns.
Asia real estate relative value ideas
Prefer Entry price Over Entry price Entry date Time horizon
Global Logistic Props S$ 2.12 FSTREH Index 750.9 27 Jan 11 9 months
CapitaLand S$ 3.65 Keppel Land S$ 4.64 27 Jan 11 9 months
Asian Property Dev. Bt 5.33 SETPROP Index 152.3 5-Apr-11 6 months
FTSE E/N Asia Index 1580.76 HSCIPC Index 3205.26 5-Apr-11 6 months
Cheung Kong HK$ 125.5 Henderson Land HK$ 53.15 26-Apr-11 6 months
Mitsui Fudosan (8801) ¥ 1336 TSE REIT Index 1054.3 24-May-11 3 months
CapitaMalls Asia S$ 1.46 Hang Lung Props HK$ 31.25 28-Jun-11 6 months
Agung Podomoro Ld IDR 365 Ciputra Dev. IDR 530 21-Jul-11 3 months
DLF Ltd INR 241.25 Godrej Properties INR 803 21-Jul-11 3 months
Stockland A$ 2.73 DEXUS Prop A$ 0.795 23-Sep-11 3 months
Westfield Retail Group A$ 2.38 CFS Retail Prop A$ 1.68 23-Sep-11 3 months
Source: Bloomberg, J.P. Morgan for stated preference. Note: Additional information available on request. Prices are stock-split and
stock-dividend adjusted.
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