Stock With Momentum: Tower Real Estate Investment Trust

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This article first appeared in The Edge Financial Daily, on April 6, 2017.


Tower Real Estate Investment Trust (-ve)

SHARES in Tower Real Estate Investment Trust (REIT) (fundamental: 2.2/3, valuation: 1.55/3) triggered our momentum algorithm yesterday as the counter closed unchanged at RM1.20.

The REIT reported a 31.9% fall in net property income in the fourth financial quarter ended Dec 31, 2016 (4QFY16) to RM4.34 million from RM6.7 million a year earlier. It declared a final income distribution of 3.73 sen per unit. Profit slumped 86.54% to RM4.19 million or 1.42 sen per unit from RM11.09 million or 3.95 sen per unit in 4QFY15. The decline was mostly due to a major building maintenance exercise as well as lower quarterly revenue, Tower REIT said in a bourse filing yesterday. Revenue slid 4.11% to RM8.9 million from RM9.29 million in 4QFY15 on the back of decreasing occupancy rates following lower demand.

The stock has a market capitalisation of RM336.6 million based on its last traded price of RM1.20 yesterday, with some 220,000 shares exchanging hands.