Reuters: Hot Stocks: STOCKS NEWS SINGAPORE-Suntec REIT, CapitaCommercial top picks-Nomura

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STOCKS NEWS SINGAPORE-Suntec REIT, CapitaCommercial top picks-Nomura Jul 10th 2012, 03:33 Mon Jul 9, 2012 11:33pm EDT Nomura said it prefers real estate investment trusts (REITs)that are cheap on an implied enterprise value (EV) basis, have defensive occupancy rates and balance sheets, and are likely to report second quarter results that exceed expectations. Its top picks among REITs are Suntec REIT and CapitaCommercial Trust, which both own office assets in Singapore. Units of Suntec REIT were up 1.1 percent at S$1.39, and have gained 29 percent since the start of the year. CapitaCommercial rose 0.8 percent to S$1.285, but jumped about 22 percent year-to-date. Despite their large gains, Nomura said both Suntec REIT and CapitaCommercial still offer potential returns of 22-25 percent at current levels. So far this year, Singapore REITs have outperformed the broader market, rising 18 percent compared to the benchmark Straits Times Index's 11 percent gain. "While REITs are generally perceived as defensive stocks by the market, concerns over portfolio vacancies, rising operating costs and balance sheets often make investors skeptical," Nomura said. However, CapitaCommercial's occupancy as of March was 95 percent, while Suntec REIT's was 99 percent, the broker said, adding that CapitaCommercials' management took steps to lengthen debt maturity from one to three years while keeping a relatively low gearing of 31 percent. Nomura raised its target price for CapitaCommercial to S$1.49 from S$1.47 and maintained a 'buy' rating. It also reiterated its 'buy' rating on Suntec REIT, but trimmed its target price to S$1.61 from S$1.64, reflecting a slightly lower net asset value estimate. 1125 (0325 GMT) (Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com) ************************************************************ 10:04 STOCKS NEWS SINGAPORE-Brokers raise CapitaLand, Ascott target prices Several brokerages have raised their target prices for property developer CapitaLand and Ascott Residence Trust stocks to reflect likely gains from the recent property transactions. OCBC Investment Research increased its target price for Ascott Residence Trust to S$1.23 from S$1.14 and kept its 'buy' rating, while CIMB Research raised it to S$1.19 from S$1.18, maintaining its 'neutral' rating. Ascott Residence units were down 1.3 percent at S$1.135, and have risen 17 percent so far this year. Ascott Residence said on Monday it will sell its Singapore asset Somerset Grand Cairnhill to CapitaLand for S$359 million, which will be redeveloped. Ascott Residence plans to buy the serviced residence portion of the development back from CapitaLand for S$405 million, with delivery expected in 2017. Ascott Residence will also buy two properties - Ascott Raffles Place Singapore and Ascott Guangzhou - from CapitaLand for S$283.3 million. "We believe Ascott Residence could have secured better divestment and acquisition pricing and accretion had it divested just the residential portion of (Somerset Grand Cairnhill) to third-parties and kept the hotel portion for its own development," said CIMB in a report. The brokerage also raised its target price for CapitaLand to S$3.64 from S$3.61 and kept its 'buy' rating. CapitaLand shares were up 1.4 percent at S$2.93, and have gained nearly 32.6 percent since the start of the year, versus the Straits Times Index's 11 percent rise. "We view this transaction favorably as management continues to recycle capital and optimize use of assets," OCBC said. It increased its target price for CapitaLand stock to S$3.25 from S$3.21, and kept its 'buy' rating. For related story click 0946 (0146 GMT) (Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com) ************************************************************ 9:18 STOCKS NEWS SINGAPORE-Mapletree Logistics falls to one-month low Units of Mapletree Logistics Trust, which owns warehouses and logistics assets in Asia, fell as much as 4.5 percent to a one-month low after a shareholder sold its stake in the trust in a block trade. By 0110 GMT, Mapletree Logistics was down 4 percent at S$0.965, with over 143.2 million units traded, 62.3 times its average daily volume over the last five sessions. It was the most actively traded stock. Alliance Global Properties sold its 5.7 percent stake in Mapletree Logistics, or 139.3 million shares at S$0.96 each in a block trade. Citigroup was the sole bookrunner, IFR reported. 0911 (0111 GMT) (Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com) Link this Share this Digg this Email Reprints

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