CapitaCommercial Trust

CapitaCommercial Trust: Daiwa cuts TP for CCT from $1.69 to $1.54, downgrades from buy to UNDERPERFORM citing unfavourable risk-reward at 1.09x P/DDM. CCT with 15.5% YTD returns way outperformed FSTREI’s 7.6% and FSSTI’s 4.0% as it benefited from sharp turnaround in local office rents. Further recovery is expected to be softer, and it is believed current trading price has fully factored in the recovery in office sector. The house cuts NPI and DPU forecasts 2014 through 2016 to take into account current market conditions, new information disclosed in AR2013, adoption of new accounting rules and expected dilution from conversion of bonds in 2015.