Ascott Reit

Ascott Reit: Macquarie u/g to O/p from Neutral, TP $1.43, noting that diversification has its benefit. With a stable yield of 6.9% and a low-risk total return of 16.3%, REIT is well-diversified by geography, which limits impact from a slowdown in a particular country. Further, 50% of its gross income is from master leases and management contracts, with minimum guaranteed income. However, Exchange rate fluctuations versus SGD present risk to earnings.