- We reaffirm our HOLD recommendation on Capitamalls Malaysia Trust (CMMT) with an unchanged fair value of RM1.50/unit, based on a DCF-derived valuation.

- CMMT announced that Sharon Lim is resigning from her role as CEO and non-independent Executive Director due to personal reasons.

- Sharon has led CMMT from before its listing on Bursa Malaysia in July 2010.

- Low Peck Chen who is currently the Deputy CEO of CMMT will be appointed as CEO and non-independent Executive Director, effective from November 1.

- Prior to the appointment of Peck Chen as a Deputy CEO on October 1, she was the Head of Finance since 2011.

- We believe Sharon would leave the company in good hands and will be facilitating the leadership transition until year-end.

- We are neutral on this development given the succession planning for the leadership role.

- We believe that the resignation of Sharon would have negligible impact on CMMT given that the core fundamentals remain intact.

- All said, we make no changes to our earnings estimates and HOLD recommendation.

- At the current level, the stock is trading with a distribution yield of 6.3%, and at a yield spread of 241bps to the 10-year Malaysia Government Securities.

Source: AmeSecurities