KENANGA Investment Bank Bhd says IOI Properties Group Bhd (IOI Prop), which announced a cash call on Monday, is probably readying funds for future overseas or local landbanking as it hopes to capitalise on low purchase prices in challenging economic circumstances.
IOI Prop has proposed a rights issue exercise on the basis of one rights share for every six existing IOI Prop shares at RM1.90 per rights share, which is expected to raise RM1.03 billion.
Kenanga said in its research note yesterday that it remains neutral on IOI Prop with a target price of RM3.10 because “it does not translate into near term excitement as new landbanking is unlikely to add to IOI Prop’s valuation considering its massive gross development value base, while the stock is already trading at a peak 55 per cent discount to its revalued net asset value”.
~ By BUSINESS TIMES
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