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KUALA LUMPUR (Oct 26): Bursa Malaysia is hopeful that its newly launched Real Estate Investment Trust (REIT) Index will spur the listing of more diverse products in the future, such as alternative REITs and exchange-traded funds (ETFs) among others.
Speaking at the launch ceremony today, Bursa Malaysia Bhd chief executive Datuk Seri Tajuddin Atan said the index will give investors better access and clearer view of Malaysian REITs' performance — which has outperformed both benchmark KLCI and Property Index over the past three years by 15% and 26% respectively.
"This will ultimately improve the depth and breadth as well as liquidity of REITs in Malaysia, for future developments of by-products such as ETFs," Tajuddin said.
This will in turn attract more real estate players to enter the capital market, he said, pointing to alternative REITs in the US, some of which with wider portfolios — including exposure in childcare or renewable energy.
REIT Index — the 11th Bursa-calculated index — is a market capitalisation-weighted index comprising 18 REITs. The segment has grown to a combined market capitalisation of RM44 billion as at Oct 19, 2017, from RM300 million back in 2005 when the first of the lot, Axis REIT, was listed.
According to Bursa Malaysia, the index would have had a dividend yield of 5% as at Sept 2017, against FBM KLCI's 3% yield.
At 10.10am, the index dipped 1.7 points or 0.17% to 1,088.99. — theedgemarkets.com
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