Fortune Reit

Fortune Reit: Daiwa ups to Outperform from Hold and keeps TP unchanged at HK$7.00. Says that unit price is starting to correct from a recent peak of HK$6.96, offering "an opportunity to accumulate the stock." Daiwa considers the pullback as normal, believes it is not yet overvalued as the REIT still offers a 5.3% DPU yield for 2013, which will rise to 5.6% in 2014. Notes that there has been a global yield-compression trend for many assets and listed REITs in recent months. Keeps its view that since the rights issue in 2009, Fortune REIT's portfolio has reached critical mass and that its asset-enhancement initiatives at Fortune City One and Ma On Shan Plaza are starting to bear fruits. The stock is down 0.5% at HK$6.55.