Friday, February 28, 2014

************** Potential Breakout: Cache Logistic. Resistance at 1.14.

Cache has been trading below the 1.14 resistance for about 3 months already after breaking down in Nov last year. Currently testing the 1.14 level again after testing it 4 times but so far unable to cross above it. A slight Bullish Ascending triangle formation seen with horizontal resistance at 1.14. A break above 1.14 and 1.15 can pave the way to 1.20 to 1.22 level. Entry on breakout
Stop loss at 1.09.
 
 
OCBC – 22 JAN 2014
Cache Logistics Trust: As steady as ever
Cache Logistics Trust (CACHE) announced FY13 DPU of 8.644 S cents, up 3.3%. This is in line with our full-year DPU forecast of 8.59 S cents. For 2014, only 3% of its GFA are due for renewal, thus giving CACHE strong earnings stability. Management also revealed that CACHE is currently in advanced negotiations with its Sponsor and end-users for the lease renewals coming in 2015, which we view positively in light of the upcoming supply of warehouse space. On the acquisition front, CACHE shared that Singapore, China and Malaysia continue to be its key markets. In addition, management reiterated that it will seek redevelopment opportunities and built-to-suit projects. We are keeping our forecasts largely intact pending any development. However, in view of impending Fed tapering, we reduce our fair value to S$1.20 from S$1.30 to reflect higher equity risk premium and risk free rate. But maintain BUY as upside remains compelling.
 

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