Fraser Commercial Trust (FCOT)

Fraser Commercial Trust (FCOT): StanChart initiates at Outperform at TP$1.10 on debt refinancing and positive rental reversions to drive 20% DPU growth. Rental reversion are expected to drive 3.3% annual growth in 2011-13E as China Square Central (28% of portfolio) and Central Park in Aus (19% of portfolio) obtain higher leases. Interest cost savings expected to boost FY12 earning by 15% if interest cost falls from current 4.1% to 3.5%. Assumption includes only 50% of pref units converted and FCOT’s Sg office rents to rise by 25% vs 35% for avg office rents. Co offers 7.1% yield at 2011e DPU.