Question
Below is the answer for Question 1: For the consideration of the above analysis, let us take the Suntec Real Estate Investment Trust (REIT) which
Below is the answer for Question 1:
For the consideration of the above analysis, let us take the Suntec Real Estate Investment Trust (REIT) which has been listed under the Singapore Stock Exchange from 2004. This particular REIT has a S$10.5 billion Asset under management and S$4 billion market capitalisation. It is the first composite REIT in singapore consisting of office and retail locations.
In the given Covid scenario, it can be seen that the Real estate sector has been under a huge lag with most of the REIT's being undervalued in the stock exchanges and their share face value has been showing a declining trend. But the Suntec REIT has not witnessed such a dip till date, yet the picture has not been so responsive too. In this evolving stage where the world has been witnessing a surge in the production of Covid vaccine and there has been some evolutions on the same, the predictions on such a sector in the near future is worth.
As given in the statiatics, IMF has predicted a world growth rate of 5.5% in 2021 and 3.6% in 2022. This is a part of the prediction that investments are going to increase and even this prediction is likely to attract the investors in the near future. Suntec REIT has also been making strives to capitalise on this evolving stage so that the advantage obtained in the near future is not lost. As the Suntec is being controlled by an external managing mechanism, it is likely to have a stabilised investment mechanism so that the future investment options would be under safe venturing. Moreover, the potential of the firm is also huge and the prediction of IMF and similar international economic institutions of the near future is also likely to bring benefits to them. The investment patterns are also likely to undergo a considerable change in the mechanism of operation so that the trust of the investors are not lost in the initial stages of evolution after the Covid scenario.
Thus, with due considerations of the above factors, it cam be seen that the Suntec has been showing a good response to the Covid scenario and the future investment options are also bright.
Please answer question 2, part C for me, thanks
Question 1 The FDA in the U.S. has just announced that it is in the final stage of approving a vaccine for final stage trials before starting production of a vaccine for Covid-19. Given this positive news, the expected U-shape recovery in global economies, is now projected to assume a V-shape recovery. The IMF now projects a 5.5 percent growth rate worldwide for 2021 and 3.6 percent for 2022. Choose a bank or REIT listed on the Singapore Stock Exchange (SGX) to carry out your investment analysis, apply your analysis to the most likely impact of such a scenario for the sector that your chosen company belongs to. (10 marks) Question 2 Following your answer in Question 1, appraise the impact of the expected economic recovery (a) (b) (c) On the fundamentals of the chosen company; By determining the intrinsic value using a dividend discount model. By carrying out a relative valuation using at least two (2) companies listed on the SGX. (35 marks) Question 1 The FDA in the U.S. has just announced that it is in the final stage of approving a vaccine for final stage trials before starting production of a vaccine for Covid-19. Given this positive news, the expected U-shape recovery in global economies, is now projected to assume a V-shape recovery. The IMF now projects a 5.5 percent growth rate worldwide for 2021 and 3.6 percent for 2022. Choose a bank or REIT listed on the Singapore Stock Exchange (SGX) to carry out your investment analysis, apply your analysis to the most likely impact of such a scenario for the sector that your chosen company belongs to. (10 marks) Question 2 Following your answer in Question 1, appraise the impact of the expected economic recovery (a) (b) (c) On the fundamentals of the chosen company; By determining the intrinsic value using a dividend discount model. By carrying out a relative valuation using at least two (2) companies listed on the SGX. (35 marks)
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