CapitaLand Investment's Asset Sale Plan Could Improve Return on Equity

Dow Jones
08/14

0601 GMT - CapitaLand Investment's plan to sell around 7 billion Singapore dollars-S$9 billion of its noncore assets and investments seems to be a good move to Morningstar's Xavier Lee. He expects the capital gained from divesting of these assets to improve CapitaLand Investment's return on equity and be redeployed into higher-growth opportunities. Growth in the real-estate asset manager's fee-related earnings and ongoing asset recycling should also support earnings growth over time, the analyst adds. Morningstar retains its S$3.00 fair-value estimate, viewing the shares as undervalued. Shares fall 0.4% to S$2.74.

 

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