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CapitaCommercial Trust: Overhang concern on gearing removed
Summary: Last Friday, CapitaCommercial Trust (CCT) announced that it will be doing a 1-for-1 Rights issue at an issue price of S$0.59 per rights unit. Approximately 1.4b units will be offered, raising gross proceeds of S$828.3m from the exercise. Latest valuation report of CCT’s properties revealed a sharp decline in the valuation of CCT’s assets. Decline in asset value has pushed CCT’s gearing level up from the reported 38.3% at the end of 1Q09 to 43.1% now, which is close to the upper band of CCT’s target gearing level of 30%-45%. After the Rights issue, our DPU forecast for FY09 will be diluted by 46.4% to 6 S-cents, translating to a DPU yield of 7.3% base on theoretical ex-Rights price of S$0.825 per unit. With the overhanging concern on its gearing removed, we think that this should be a positive catalyst to CCT’s share price. We keeping our fair value of S$1.33 and maintain our BUY recommendation on CCT.
Hi Supreme, emm do u see any potential for this stock in future. What i know is that it is the larger Reit among those reit (so suppose should be potential, assume). Correct me if i am wrong.
imho, doesn't really matter. Just switching source of capital. if you don't want that much capital in there just sell the rights or the stocks.
Emm at least i guess we won't see the share value ramp down that much like Keppaland & capitaland when the Right things end.
Seems like selling not quite aggressive. Maybe the investor have very high confident with CapitComm. Its reacting differently fr Keppaland & Capitalland. Althougth the share price up only abit.
That looks quite very POSITIVE.
Anyone can comment on the recent performance of this baby