Far East Hospitality Trust

Far East Hospitality Trust: CIMB initiates coverage with Hold call and $0.82 TP. The house notes that with a portfolio diversified across Singapore and about 25% of it (by asset value) made up of serviced residences, FEHT is well-positioned to tap the visitor market in Singapore, in our view. In addition, fixed and commercial rents offer an estimated 60% (based on FY13 earnings) of gross income protection, which makes FEHT one of the more defensive hospitality REITs in Singapore. Although earnings are expected to be resilient, believe FEHT is fairly valued given the lack of strong near-term drivers, a lower NPI yield than peers and a higher valuation for its portfolio. Re-rating, however, could come from any positive surprises in tourist arrivals or corporate spending.