CMA

CMA: StanChart believes that CMA’s major sh/h Capital Group has finished selling part of its interest in CMA. Capital Group originally had an 11.2% stake in CMA (a third of the free float of 33%). The investor then began to offload part of its stake from Jul ’10 onwards. A yr later on 22 Jul ’11, Capital Group disclosed its take in the co had dropped below 5% to 4.982% and no longer had to disclose its transactions.
StanChart believes StanChart continued to sell down its stake (accounting for ~75% of daily volume), and this weighed on CMA’s share price and investor confidence.
The block trade of >40m shares yday may have mopped up the remaining overhang. StanChart estimates Capital Group could have another 40-50m CMA shares left, but believes it has finished selling and is likely to retain whatever is left.

House notes CMA has falled 39% ytd, and is trading at 0.8x P/B, and 0.6x P/RNAV. Sees substantial value in the stock, and is one of its top picks in the Spore real estate sector. Says positive invmts such as the recent acq of 2 Shanghai malls will be immediately earnings accretive and should boost investor confidence. Reiterates Outperform with TP $1.76.