Tepid margin financing may indicate retail interest in reits cooling, say brokers
Champion Real Estate Investment Trust saw only lukewarm margin financing on the first day of its public offering in a sign that retail investor interest in reits may be starting to cool, brokers said.
They said while Champion Reit's unattractive yield had discouraged retail investors, overall interest towards reits was beginning to wane.
Sun Hung Kai Securities, a major initial public offering margin lender, said it had lent only $100 million for Champion Reit, while Phillip Securities reported about $14 million worth of orders.
Celestial Asia Securities and KGI both said the demand had been too small to be noted while Prudential Brokerage said they had received no orders on the first day.
'Although a tepid response is normal for most public offers, I believe that Tianjin Port [Development Holdings] has stolen the limelight,' one trader said, referring to the ports giant which plans to list on May 24.
'The odds for investing in Champion Reit are lower compared with Tianjin Port, making investors reserve their money for the latter,' said Ben Kwong, a director at KGI Asia.