Amara jumps; CIMB initiates outperform

Stock Name: Amara
Company Name: AMARA HOLDINGS LTD

Research House: CIMB

Price Call: BUY

Target Price: 0.50

Shares of Singapore hotel developer Amara Holdings (AMRA.SI) jumped as much as 8.2% on Friday after CIMB Research initiated coverage on the stock with an outperform rating and a target price of $0.50, traders said.

At 11:19 a.m., Amara shares were up 6.6% at $0.325 on a volume of 603,000 shares, around 4.5 times the average daily volume so far this year.

CIMB said Amara was trading at a 65% discount to its revised net asset value based on just its Singapore assets, offering investors a good margin of safety.

Two new hotels in Shanghai and Bangkok are also being developed and are expected to boost the company’s earnings when completed in 2014 based on CIMB’s estimates.

In Singapore, CIMB forecast an upside in revenue peravailable room as the growth in tourist arrivals is likely to outpace hotel room supply over the next two years.