Weekly trading idea: Buy MXUPA on 7.8% running yield
Weekly trading idea: Buy MXUPA on 7.8% running yield. On risk/reward considerations, Multiplex SITES at $85.05 offers value for investors with an above average risk tolerance seeking an uplift in yield. The 7.8% running yield appears attractive given the income is derived from the Brookfield Australia Property Trust, which has successfully reduced its gearing to more moderate levels over recent years. Increasing mergers and acquisition activity in the property trust sector and increasing availability of cheaper senior debt improve the potential for MXUPA redemption. While MXUPA is a perpetual security with no set redemption date, the discount to face value provides income to investors at a margin of 5.06% above the current 90BBSW. MXUPA also provides capital upside potential trading over $5 below its Feb2013 high of $90.45. It is also worth noting that in Sept.2011, Brookfield Securities became a substantial shareholder of MXUPA with an 8% holding.
Bell Potter Securities is a leading Australian stockbroking, investment and financial advisory firm that provides a comprehensive offering of financial services to a diversified client base that includes individuals, institutions and corporations.