Brokers' take

Netlink NBN Trust | Buy Target price: S$0.87 July 2 close: S$0.75 DBS Group Research, July 2

Amid an increase in the 10-year Singapore bond yield and broader market weakness, Netlink NBN Trust's (NLT) share price has corrected around 7 per cent (ex-div) YTD. NLT is trading at around 6.4 per cent FY19F yield, similar to large-cap industrial S-Reit's average yield.

We argue that NLT should trade at a tighter spread than S-Reits as (1) NLT's distributions, due to the regulated nature of its business, are largely independent of the economic cycle (2) NLT's gearing is less than half of S-Reits' with an ample debt-