CapitaCommercial Trust (CCT) trades ex-Rights today

Wednesday, June 3, 2009

Today (3rd June 2009) will be the first day of ex-rights trading for CapitaCommercial Trust (CCT) units. Based on yesterday's closing price of S$1.30, the theoretical ex-rights price of CCT is S$0.945. We have an ex-rights fair value of S$0.96 (S$1.33 before ex-rights) and BUY rating for CCT.

Investors' top concerns were the retail outlook in Singapore, CMT's ability to cope with competing malls entering the market, and management's acquisition and asset enhancement plans. Management is confident that its active management of tenant mix and positioning of malls will underpin its portfolio's resilience despite the entry of new competitors. Organic growth will be the focus for the next two years. CMT has a post-rights adjusted P/BV of 0.83x and a forward yield of 6.8%. We maintain our Underperform rating and DDM-based target price of S$0.87 for now. We are reviewing our estimates for CMT for a potential upgrade.

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