August 31, 2012 / 1:30 AM / 5 years ago

STOCKS NEWS SINGAPORE-CIMB downgrades Parkway Life to 'neutral'

CIMB Research downgraded Parkway Life Real Estate Investment Trust, which owns healthcare assets, to 'neutral' from 'outperform', citing high valuations as it trades at a premium.

Units of Parkway Life were down 0.5 percent at S$1.925, and have gained 8.2 percent so far this year.

"The market has rewarded the stock with a handsome defensive premium. At 30 percent premium over book and yield compression to 5 percent, we struggle to see significant upside," said CIMB.

However, CIMB raised its target price to S$2.11 from S$1.96, taking into account a lower discount rate of 7 percent, and said possible acquisitions in Malaysia and Australia could be a re-rating catalyst.

In Japan, the plans of Parkway Life's management to upgrade assets is a compelling strategy for long-term growth, said CIMB.

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Reporting by xx in Singapore; firstname.lastname.thomsonreuters.com

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