Thursday, October 05, 2006

Stock Upgraded: Keppel Land target price raised to 5.33 by Credit Suisse

Credit Suisse said it has lifted its target price for Keppel Land to 5.85 sgd per share from 5.33 previously as it sees the property developer as "the best proxy" to the rising Singapore office market. "Its net asset value is the most sensitive to office rents -- triple that of City Developments. Given its dominance over the newer financial district, its properties are likely to benefit from premium rents, we believe," Credit Suisse said. Keppel Land and its partners Cheung Kong Holdings and Hong Kong Land Holdings built Singapore's most modern building, One Raffles Quay, and the same group is developing the new Business and Finance Centre. "It is (also) a play into the mid to high-end Singapore residential segment where we see most upside. We believe downside risks are limited for its China residential exposure, given that its projects are targeted at local and the middle- to upper-middle market segment where genuine demand remains healthy," Credit Suisse said. "Keppel Land valuations at current levels remain attractive and we recommend a switch from City Developments to Keppel Land. We rate City Developments 'neutral' with an 11.20 sgd target price," it added. At 9.03 am, Keppel Land was up 0.05 sgd at 5.05 with 196,000 shares traded, while City Developments was up 0.20 at 10.20 with 152,000 shares traded.

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