STOCKS NEWS SINGAPORE-OCBC cuts CDL Hospitality target, keeps 'hold'

Source : REUTERS
Last Updated: Fri, Jun 14, 2013 03:10 hrs

OCBC Investment Research lowered its target price on Singapore's CDL Hospitality Trusts to S$1.79 from S$2.05 but kept its 'hold' rating, citing weaker revenue per available room (RevPAR) projections in Singapore.

CDL units were up 0.55 percent at S$1.83 versus a 0.8 percent gain in the benchmark Straits Times Index on Friday. The stock has fallen about 3 percent so far this year.

From January to April, RevPAR for Singapore hotels fell 2.6 percent from a year earlier to S$218 ($170), OCBC said, adding visitor arrivals are converting into fewer room nights on a per capita basis.

OCBC forecast hotel room demand growth of 5.4 percent per year from 2013 to 2015, lower than the projected 5.8 percent per annum increase in room supply.

"Concerned with an oversupply situation building up in the hospitality market and generally weak performance of the industry year-to-date, we are lowering our FY13 RevPAR growth assumption for CDLHT's Singapore hotels from 0% to -5%," OCBC said.

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