Capitaland: Deutsche has highlights from mgt meeting. Focused on improving ROE, which has fallen to 7% currently vs 12-14% the company achieved from 2005-2008 as its equity base has grown especially after the $1.8b rights issue in 2009. Mgt suggest that a 10-12% ROE would be a reasonable level.
Capital recycling model still intact, Capl has committed $5b of new investments in 1H11 and recycled $595m of capital, and will likely exceed its initial acquisition target of S$5-6b this yr. Co. is well positioned for potential downturn, Capl's net gearing stood at 0.23x at 2Q11 with cash balance ofS$6b which leaves it well positioned in a stressed environment. Share buybacks are capped at 2% of issued shares and not viewed as a capital management initiative.
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