STOCKS NEWS SINGAPORE-OCBC raises CapitaCommercial target price

OCBC Investment Research raised its target price on CapitaCommercial Trust to S$1.62 from S$1.53, and kept its 'buy' rating, citing better-than-expected outlook for office rentals.

At 0108 GMT, units of CapitaCommercial were up 0.3 percent at S$1.515. They have surged 43.6 percent since the start of the year, compared with the FTSE ST Real Estate Industrial Trust's

31.3 percent gain.

OCBC said grade A office rentals in Singapore are likely to show a smaller decline in the third quarter, and vacancies in the central business district reversed their rising trend, falling 0.9 percentage point in the second quarter to 8.4 percent.

"We expect a similar trend for vacancies in the third quarter, which would likely contribute to a muted rate of rental decline," said OCBC.

The brokerage noted that CapitaCommercial also said it had refinanced an outstanding balance of its convertible bonds due in 2013, with a new S$175 million convertible bond issue due in 2017.

0910 (0110 GMT) (Reporting by Charmian Kok in Singapore;; Editing by Prateek Chatterjee)