Property stocks hit the jackpot on back of KepLand privatisation bid

The deal will unleash liquidity for other stocks.

Domestic property stocks will win big thanks to Keppel Corp’s $3b privatisation bid for KepLand. According to CIMB, the deal could unleash liquidity that could be rotated into other property stocks within the same universe.

CIMB states that the closest alternatives to KepLand would be UOL and FCL, which have S$5bn-5.7bn market cap. From a liquidity standpoint, stocks such as Capitaland and City Dev would also bebeneficiaries.

Apart from spillover liquidity, the deal could also re-ignite interest in the smaller-cap property counters that hold capacity for corporate action.

“Among the midand smaller-cap property companies that continue to be attractively valued when compared to this range, Ho Bee, Wheelock Properties and Wing Tai’s P/BV metrics are still well below this range,” stated CIMB.