Singapore Stock Market News

REIT - Closer look at Business Trusts

StockFanatic
Publish date: Thu, 23 May 2013, 12:42 PM
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Though investors' perceptions of Business Trusts (BTs) have been tainted by a few weak listings, we think it is too early to slap a life sentence on all. We see reasons why certain assets/ operations have to be listed as BTs. Recent listings are also faring better, and we see room for improvement with better investors' perceptions and understanding.

Key criticisms of BTs include risks and corporate governance. We think the former could be reined in through the trust deed and the latter addressed by regulatory bodies in future. With proper strategy and execution, BTs could provide a higher-growth alternative to REITs (NEUTRAL) and a dividend-friendly alternative to companies.
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