CapitaMall Trust (CMT): UOB maintains a Sell rating of TP $1.85 on CMT compared to $2.02 closing price. DPU of 6.88 cents was in line with expectations of annual DPU of 9.30 cents in 2010. UOB listed several factors impacting rating,
1) dilutive impact of convertible bonds,
2) Narrowing of rental spread in prime Orchard Rd. Rents in Orchard are expected to fall 5-10% in 2H10 due to supply…
3) Relative flat consumer retail spending. CMT’s ytd gross turnover increased 5.6% but dipped on consumer goods. 4) High relative valuation for CMT. UOB noted that CMT has gained 12.2% ytd compared to 9.7% for the Property REITs index and 8.7% for STI. Dividend yield for CMT is at the lowest at 4.5% as compared to all S-REITs.