KUALA LUMPUR: UEM Land is a strong candidate for inclusion as an index component of the FBM KLCI being the largest property stock on Bursa Malaysia by market capitalisation and landbank size now, OSK Research says.
It said that despite the company's rather premium valuation against its peers, the stock's potential inclusion into the barometer and positive news flow from Iskandar region would give the boost for an upward rerating.
The acquisition of Sunrise which was completed in February, boosted UEM Land's market capitalisation to about RM11 billion.
"Once included as one of the index components, it will be the only pure property stock in the index.
"It will raise the company's profile and visibility, and subsequently justify its premium valuation given that the FBM KLCI top 30 stocks are typically used as a benchmark portfolio," OSK said in its Malaysia Equity Investment Research Daily on Tuesday, Apr 19.
UEM Land is the flagship company for the real estate investment and development businesses of UEM Group, which is a wholly-owned by Khazanah Nasional, the government's investment holding company.
OSK said UEM Land was a good proxy to the government's strategy to propel the domestic economy towards high income status, particularly under the Economic Transformation Programme.
Due to its size and the growth prospects, the company's liquidity was the highest among the listed property stocks as foreign and local institutional interest on the stock had picked up, it added. — Bernama
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