Stock Outperform Call: Capitaland with target price of 6.6 by Macquarie!

Macquarie Equities Research says CapitaLand is its top pick among property development stocks here. "The Asian property outlook remains strong in 2007 and CapitaLand, in our view, is the best proxy to Asian reflation," Macquarie said in a recent note to clients. The brokerage said CapitaLand is benefiting from the demand for property here and in China. "We believe Singapore office rents will test 1996 peaks and expect strong sales in the high-end residential segment against the backdrop of the remaking of Singapore into a global city," it said. CapitaLand's exposure to the Chinese property sector is equally split between the residential, retailing, serviced apartment and office sub-sectors, and this should minimize the effect of any moves by the government there in future to dampen the housing market, Macquarie said. Macquarie has an "outperform" rating for CapitaLand and a target price of 6.60 sgd per share. This target price does not take into account the possibility that CapitaLand will win the licence to build and operate a casino resort on Sentosa Island here. The government is to announce this month the winning bidder for the Sentosa casino resort project. Macquarie said that if CapitaLand and its partner, Kerzner International, won the bidding, it would raise its target price for CapitaLand by 0.46 sgd per share. At 11.06 am, CapitaLand was up 0.05 sgd or 0.78 pct at 6.45, with 5.05 mln shares traded.