Thursday, March 31, 2016

Cache Logistics raised to ‘buy’ by OCBC with lower 88 cents fair value

OCBC is upgrading Cache Logistics Trust to “buy” from “hold” but cutting its fair value estimates to 88 cents from 90 cents.

The bank is upgrading of its recommendation as it believes the negatives surrounding the stock are already priced in.

“Operational challenges faced by Cache Logistics Trust were apparent in its recent fourth quarter results, as net property income for its Singapore properties fell 12.3% year-over-year to $16.8 million,” OCBC notes.

The decline was largely due to the conversion of several properties from master lease to multi-tenancy, coupled with the subdued industrial market conditions.

OCBC is also cutting its FY2016 and FY2017 distribution per unit forecasts by 2.8% for the company.

Cache Logistics Trust closed 1.8% higher at 84.5 cents.

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