Keppel Land/ Keppel Corp

Keppel Land (KPLD)/ Keppel Corp (KEP): Are on trading halt. CLSA speculates this could most likely stem from a restructuring of jointly held assets between KPLD and KEP. A move by Keppel Corp to divest its 70% stake in Keppel Bay Pte Ltd to Keppel Land is most logical as it offers further streamlining impact to the group. However, such a move would also raise questions over KEP’s need for cash and KPLD’s increased exposure to the challenging Singapore residential market. While house don’t rule out privatization offer for Keppel Land which can see 19% upside based on past take out P/B multiple of 0.88x, CLSA thinks the likelihood is low. Pending further announcements, CLSA reiterated its Underperform rating on KPLD and continue to view KPLD’s operating environment as challenging.