Olam kicked out of MSCI Singapore Index by aggressive Suntec REIT

Suntec’s share price hit a one-year high yesterday.

Suntec REIT saw a huge volume of traded stocks yesterday, after it was included in the MSCI Singapore Index at Olam’s expense.

According to OSK DMG, a huge volume of 129.3m units in Suntec REIT took place just minutes after the 5pm normal closing yesterday, causing the counter to shoot up to the top of the most active stock list.

“In all, 180.2m units changed hands - nine times Monday's trading volume. The unit price, too, rose three cents to hit a one-year high of SGD1.935 - the same price at which the surprise trades were done during the adjustment period after normal closing. This could be due to Suntec REIT replacing Olam International in the MSCI Singapore Index from Wed onwards,” noted OSK DMG. 

Here’s more from OSK DMG:
On price performance, Suntec REIT is up 25.6 year-to-date and is the best-performing REIT this year. 

We are overall optimistic on its AEI’s efforts at Suntec City and remain confident that it will achieve average rentals above its original target of SGD12.59 psf/mth, following the completion of all three phases at Suntec City Mall. 

Recall that Suntec City Phase 2 AEI opened on 1 Jun and achieves 99.4% occupancy in 3Q14, while Phase 1 attained full occupancy. Phase 3 is on schedule to complete by year-end and is currently 60% pre-committed.
We forecast Suntec’s DPU to grow at a CAGR of 3.4% over the next three years.

We believe that Suntec’s near-term share price performance will be supported by the completion of its AEI at Suntec City Mall.