Stock Upgraded: F&N price target raised to 5 by ML

Merrill Lynch has raised its target price for Fraser & Neave Ltd (F&N) to 5.00 sgd from 4.38 as it expects the firm's property business to benefit from the recovering domestic market. "We believe Fraser & Neave is well positioned to leverage off the strong recovery in the Singapore property market over the next three to four years," Merrill Lynch said in a note. F&N has launched seven property developments this year and Merrill Lynch believes the company will launch at least three in 2007 and another two in 2008. "The strong launch program underway should result in (its) Singapore residential property EBIT (earnings before interest and tax) increasing from 91 mln sgd in 2005 to 295 mln in 2008," it said. Merrill Lynch said it has revalued F&N's listed investments, which include Asia Pacific Breweries and Frasers Centrepoint Trust, estimated to be worth 2.7 bln sgd and accounting for 31 pct of the group's total assets. Merrill Lynch advises a "buy" on F&N shares and believes the company is well positioned to leverage off the economic growth in Singapore and across Asia. At 9.53 am, F&N was up 0.02 sgd or 0.47 pct at 4.32 with 577,000 shares traded.