CapitaLand climbs to six-month high on China

CapitaLand Ltd, Southeast Asia’s biggest developer, rose to the highest in six months after CIMB Group Holdings Bhd raised its rating on the stock to “outperform” from “neutral,” saying the company will benefit from a potential monetary easing in China.

Shares of CapitaLand, the Singapore-based developer that get about 21 per cent of revenue from China, climbed 3.5 per cent to S$2.95 as of 12:05pm, which would be its highest close since July 27.

“Much focus now lies on rising expectations of moderating policy cycle in China,” which could drive CapitaLand’s share price, CIMB analyst Donald Chua wrote in a note to clients today. “Some signs of loosening in credit is beginning to show. Some banks in Shanghai are also reportedly starting to lower their mortgage rates.”

China’s central bank cut lenders’ reserve requirements in December for the first time in three years to boost credit amid moderating overseas sales. The People’s Bank of China this week pledged to ensure loans for first-home buyers as a crackdown on speculation threatens to trigger a slump in the property market.

The nation’s inflation unexpectedly accelerated in January on the boost to spending from a weeklong holiday, limiting room for monetary easing as Europe’s debt crisis damps exports and the property market cools.