REIT Sector Call with Liquidnet: Review

On Thursday June 2nd, the NYSE hosted a Reit Sector Call with our partners from Liquidnet. Rebecca Darst from our MAC desk joined Rob Malin from Liquidnet to provide some key points of interest on the call:

  1. During the first half of 2011 the listed REIT community is once again outperforming the overall market, with the MSCI REIT Index posting gains of 8.4% YTD versus 5.7% gains for the DJIA, and 4.3% gains in the S&P 500 over the same period. Investors are still being attracted to the healthy yields being offered by these products.  
  2. Of the top 5 hedge fund holders in Large Cap REITs, 3 have reduced their holdings in Q1, with the seller liquidating 25% of their holdings during the quarter. On the institutional side the top 5 active owners were all net buyers, with the top name adding over $1 billion to their REIT portfolio. 
  3. Generally speaking there is not a tremendous amount of options activity in the REIT sector as a whole. A good portion of the volume can be traced back to market making firms as hedging activity.
  4. In late April, Liquidnet saw a significant rise in institutional sell interest in the REIT group, led by a flight from the residential sector. The selling coincided with a rally in the RMZ REIT index, and was most likely a product of “selling into strength”.
  5.  In May net liquidity trended back to the buy side, fueled by interest in the industrial and retail sectors. This buy sentiment has helped to provide support in the face of weakness in the overall market.

Our listed companies can access the Liquidnet Infrared sentiment indicator, (which provides you with real-time institutional sentiment) in the Data Center tab located in NYSE Connect. To find out more about Liquidnet, please contact your client service rep.

 

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