Investors sold a significant amount of shares in nine out of 18 Malaysia-listed real estate investment trusts (M-REITs) on Wednesday (21 March) that led to a decline in their unit prices, reported The Edge Financial Daily.
“It is very unusual. The selldown of these stocks should have been done [in the] earlier part of last year when a few REITs started to show weakness,” said Kenanga Research analyst Marie Vaz.
“But after that, there seems to be no other additional weaknesses to warrant such a big selldown at this time of the year.”
Notably, the sell-off occurred before the US Federal Reserve raised its benchmark funds rate from 1.5 percent to 1.75 percent on Wednesday, but this was a widely-expected move for the US central bank.
“Even if they decide on one interest rate hike, it is well expected. There is no reason for all the jitters in the market for REITs. [The hike] should have been priced in a long time ago, as the Fed has been guiding for at least three rate hikes since (former chairman Janet) Yellen was in charge,” noted Vaz.
In particular, nine M-REITs recorded lower unit prices at the close of the stock market on Wednesday. Four were unchanged and two were untraded.
On the other hand, only three posted a slight gain, and interestingly, all of them are retail-focused REITs. Hektar REIT owns Subang Parade mall, IGB REIT controls Mid Valley Megamall and The Gardens, whereas CapitaLand Malaysia Mall Trust is known for its Penang Gurney Plaza.
Shares of Hektar REIT and IGB REIT each edged up by one sen to RM1.17 and RM1.47 respectively, while that for CapitaLand Malaysia Mall Trust rose 1.5 sen to RM1.
Meanwhile, the worst-performing REIT was Al-Aqar Healthcare REIT, whose units fell 4.03 percent to RM1.19. This is followed by Sunway REIT and Pavilion REIT, which recorded a decline of 3.16 percent and 2.21 percent to RM1.53 and RM1.33 respectively.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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