Reits, banks hit in weak session
Sell-off in Reits sees 18 of top 20 actives close lower, resulting in 0.83% drop in FTSE FT Reit index
THERE were no real surprises on Wednesday as the Straits Times Index (STI) dropped 18.79 points to 3,232.47 in response to Wall Street's large overnight fall that came about because of concerns over the North Korea situation and the US government's debt ceiling.
What was surprising however, was a large sell-off in real estate investment trusts (Reits) which saw 18 of the top 20 actives close lower. As a result, the FTSE FT Reit index recorded a 0.83 per cent drop. According to market watchers, the Reit sell-off was a reaction to a proposed rights issue by Cache Logistics Trust which comes a few days after Manulife US Reit also announced a rights issue.
"The market may be thinking that this year will see more cash raising by the Reits," said a dealer. "In this market, not many people are that keen to put more in. This is collateral damage from Cache and Manulife."
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