DBS Vickers initiated coverage of Religare Health Trust with a ‘buy’ rating and a target price of $0.97, citing an attractive dividend yield and exposure to the fast-growting Indian healthcare sector.
By 12:02 p.m., Religare Health shares were up 3% at $0.82, but still 8.9% lower than the initial public offer price of $0.90. Religare Health made its market debut last month.
The brokerage expects Religare Health, which has 17 assets and is backed by India’s healthcare services provider Fortis Healthcare, to pay a distribution yield of around 10% at its current price, and is structured to offer upside potential through variable fees.
As 96% of Religare Health’s assets are operational, distribution income can be sustained till 2014, providing assurance that it will be able to meet DBS’ distribution per unit forecasts, it said in a report.
“Healthcare industry outlook in India looks promising,” DBS said, citing Frost and Sullivan’s estimates that the market will grow at an annual average rate of 15% from 2010-2015 on the back of rising and aging population and growing affluence.
No comments:
Post a Comment