The Curious Case of CapitaMall Trust


forex no deposit bonus
CapitaMall Trust (CMT), at a price of $2.29, is moving against the broad market trend. While the STI is fast approaching bear territory, CMT is near its 52-w high of $2.31, it is also near its highest price in the past 5.5 years.
This has piqued my interest to look deeper.
Interesting Price Movement
Looking at CMT’s 4 year chart, the stock shows a rather distinct pattern of range-bound movement.
On hindsight, one can attempt to enter CMT at the low range of this price channel at around $1.85-$1.95, and profit from its rise to a high range of around $2.15 to $2.20. This entails a profit margin of between 10% to 19% with a waiting period of between 1.5 mths to 8 mths.

Opportunities of range trading for CMT in past 4 years. Source: poems chart live

It seems that CMT is behaving like a swing trading stock, ideal for mid term trader holding for months for some good profits. This could even apply to a seasoned income/dividend investor.

Some Background Info of CMT
CMT is arguably the flagship retail REIT in Singapore. It owns major shopping malls that are household names, such as Junction 8, Tampines Mall, Bugis Junction.
Some interesting facts:
  • it owns 40% of Raffles City. Other major owner includes Capita Comm Trust
  • it is the first REIT listed on SGX in Jul 2002, after a failed attempt in 2001
  • it has been the largest REIT for a long time, until (if my memory is correct) the past 1 year when Ascendas REIT surpassed its market cap. Recent price surge has helped it re-capture the largest REIT title
  • it also owns approximately a 13% stake in Capita Retail China Trust

Since IPO, it has enjoyed steady growth in distributable income which increased from $64.9m in 2003 to $395.8 million in 2017. This is a CAGR of 13.8%.
Distribution per Unit (DPU) shows a steady trend in past 5 years from 2013 – 2017: 10.27 (cents), 10.84, 11.25, 11.13, 11.16. Although DPU trend has stagnated past 3 years, it is poised to increase as first three quarters 2018 DPU have improved by 1.8% (Q1),  2.2% (Q2) and 5% (Q3) respectively.

Is Distribution Sustainable

Distributions amount that is consistently below the Net Ops and, in an ideal case, Free Cash Flow, suggest that the distributions are sustainable.
For this, I delve into CMT’s past 10 year record. From the table below, it seems that CMT’s distribution amount has always been below its Net Operating Cash Flow. However, distributions had been higher than Free Cash Flow since 2011.
Source: Shareinvestor.com and CMT annual reports
REITs distribute majority of earnings and depends heavily on financing for its operations. It is crucial to check CMT’s capital management particularly Gearing and Interest Cover Ratio. These provide good indication of distribution sustainability.
Fortunately, CMT has a low Gearing of 31.7% and Interest Cover Ratio of 5.3x based on latest quarterly earnings. Its historical record shows that CMT has been managing its capital prudently in the past 5 years.
Source: CMT Presentation at Morgan Stanley 17th Annual Asia Pacific Summit
Current Valuation
At a price of $2.29, CMT’s distribution yield is 4.98%, based on last twelve months distribution of 11.41c. Personally I don’t find this an attractive yield as I demand a minimum 6% to compensate for the additional risks undertaken.
At 6% yield, assuming the same dividends, CMT has to trade at a market price of $1.90, which is within the low price range for mid-term trading shared earlier.
However, if we project 4th quarter distribution to grow by an un-demanding rate of 3% ie 2.99c (4Q 2018 distribution was 2.90c), this would give 2018 full year distribution of 11.5c. With a yield of 6%, i would need CMT price to be around $1.92 before purchasing its shares.
CMT last attained this price back in May 2013, a good 5.5 years ago. I am definitely not a buyer at this moment, given the uncertainty of equity market being dangerously close to bear territory.
By waiting for $1.92, I am securing a higher 6% yield. There is also a good probability of trading profit by selling at $2.20 to 2.30, recycling my capital for better use. Its historical record shows that CMT has been managing its capital prudently in the past 5 years.
no deposit bonus forex

Leave a Reply

Your Name (required)

Your Email (required)


Your Message

BonusMin. DepositMax. ReturnsRating
ayrex$10,000$20090%Rating Ayrex Options Review
$10,000$581%broker Rating Freestyle Review
Finmax$10,000$20090% FiNMAX Review
StockPair$20,000$585%broker Rating Falcon Finance Review
24optionUnlimited$25089%Top Binary Options Brokers Rating 24option Review

To invest with binary options you will work with an investment broker who is licensed to work in this field. Working with your broker, you will identify which asset you want to buy an option on, how much you want to invest and when the option will expire. Once the option is placed, you simply watch the trading activity on that asset to see if your prediction was accurate or not.

Binary options are one of the most popular trading choices for investors today, due in large part to their simplicity and the fact that you always know all the risks and payoffs ahead of time.

  • regulated: we promote only regulated brokers whose business models and marketing practices are checked by relevant government authorities.
  • special features: here we list all the important features that a broker offers. These are usually listed as perks offered trough various account types which bring different levels of service, depending on the minimum funds deposited
  • bonuses: almost every Top Binary Options Brokers offers these rewards that increase trading potential. Fair Binary Options also lists terms and conditions that come with the bonus money so traders always know how will these affect their trading efficiency.
  • the best binary trading platforms reviewed: we review the software that makes trading possible. There are several big providers, such as SpotOption, TechFinancials, Tradologic, MarketsPuls… Every software has some special characteristics, and not every software is suited for every trader
  • assets: Fair Binary Options review provides basic info on the amount of assets available for trading
  • customer support: we chat with the customer support to test how the broker has set up the help desk that should support traders. This is the best way to assess the service.
  • payments: we list all the payment options available by the Top Binary Options Brokers, list minimum deposit requirement
  • withdrawals: we warn traders if withdrawal requirements are too high, or if it takes a long time to get the money back.
    • Keras - self-learning NEURAL networks for
      Stock market forecasting
      Get it FREE








      *number of participants is limited

      Customer Testimonials

      Fellas what broker is legit in States ? binary options binary options broker USA?
      FrankyP