Friday, August 20, 2010

CapitaMall Trust

CapitaMall Trust: KE maintains Buy with $2.23 target. Views recent data on consumer spending as positive for CMT’s retail tenants. Eg. The recently concluded Great Singapore Sale drew a total spend of $1.2b (+28% yoy), while the Retail Sales Index for June grew 5% yoy, excluding vehicle sales…

Expects growth to be underpinned by proactive lease mgt and asset enhancement initiatives, with catalyst to come from possible co-acquisitions with sponsor CMA, which is looking to invest btwn $800m to $1b in assets in 2H10…

The stability of distributions (decent 4.9% FY10E yield), backed by a predominantly suburban mall portfolio with 99% occupancy over the past 10 yrs, makes CMT a good candidate as a long term invmt. Chart looks pretty and supports a long term view. Uptrend appears intact, with both the 50 and 200 MA sloping upward. Support 1 at $1.90, support 2 at $1.84 (200 MA). Resistance at $2.02, and a breakout above that could see the stock move rapidly toward $2.20.

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