FCOT

FCOT: announced that of the 170.73m units (~50% of total CPPU issued) of CPPU that it wishes to redeem, it has successfully exercised the right of redemption on 47.6% of the total issued CPPU. At the same time, at the request of existing unitholders, 7.4m CPPU shall be converted to 6.3m new shares (~1% of the total current share base) based on a conversion price of $1.1845. As the total CPPU available for trading has effectively been reduced by half, together with the consideration of a slight dilution in shares, DMG expects this redemption exercise to provide an increase of ~10% and 13% in DPU for FY13 and FY14 respectively. Recall, although the CPPU is currently costing FCOT an average of 5.5% annually on the DPU level, the payment to CPPU unitholders has translated to c.30-35% of total distributable income over the last few years. The house maintains Buy on higher TP of $1.51 (from $1.41).