Hot stock: CMT falls; OCBC downgrades stock to 'hold'

SHARES of CapitaLand Mall Trust (CMT) fell on heavy trading on Thursday, with OCBC Investment Research downgrading the stock to "hold".

"Time for a breather," OCBC Investment Research said on Thursday. "We believe headwinds facing the retail sector would continue to pose challenges for retail Reits such as CMT."

Amid broad market strength, the stock fell three Singapore cents, or 1.4 per cent, to S$2.13 as at 11.31am. It was among the most actively traded stock, with some 11.5 million shares changing hands.

This comes as CMT's share price has appreciated nearly 12 per cent since the start of the year, making it the top-performing Singapore Reit (real estate investment trust), OCBC Investment Research said. This has compressed its 2016 distribution yield to 5.3 per cent. Its five-year average yield stood at 5.5 per cent.

The brokerage kept the fair value of S$2.10, but downgraded the stock to "hold" from "buy".

The brokerage also noted that for 2015, rentals of retail space in Singapore's central region came in lower by 4.1 per cent. The weakness was reflected in CMT's numbers, as it registered a moderation in its rental reversion in fiscal 2015. But the brokerage also said CMT should stay resilient and still deliver positive rental reversions in fiscal 2016.