Following the closure of the takeover offer by UOL for UIC shares, free float of UIC shares will be significantly reduced to c.20%. The poorer liquidity coupled with the weak office market outlook would likely drag on share price performance as UIC is a major office landlord through its subsidiary Singland. We have lowered our TP to $0.96, premised on a 15% discount to RNAV of $1.13 and maintain our Fully Valued call.

Raised its stake in excess of 45%. UOL had garnered a 45.6% stake (excluding the c.3% it received from the public) in UIC at the close of its general offer on 3rd Mar. While the offer did not go unconditional, it would still make UOL and its related parties the largest shareholder in the group, exceeding Gokongwei’s 35.3% stake, thus further cementing the former’s hold on the company.

Impacted by a weak office and hospitality market. Recent 4Q08 results saw the beginning of asset writedown with a $397m fair value loss on investment properties, pushing bottomline into a negative $74.6m for FY08. Increased downward pressure in office rents upon renewal would mean that the positivegap in rental reversions is likely to be reduced going forward. Meanwhile, its hotel exposure through 3 hotels, Marina Mandarin, Oriental and Pan Pacific, are experiencing slower room uptake with occupancies at 50-60% in tandem with the contracting economy and reduced corporate travel. Thus, we have lowered our FY09 earnings by 11% to $249m (before writedowns) to factor in a declining office and hospitality outlook.

Maintain Fully Valued with a reduced TP of $0.96. We believe investor interest in the stock may dwindle with reduced liquidity and the high exposure to the office sector. We are lowering our RNAV to $1.13 after marking to market the value of Singland shares. Our TP of $0.96 is premised on a 15% discount to asset backing would translate to a 20% downside from here. Maintain Fully Valued.