CapitaLand +8.0%; Players Covering Shorts

CapitaLand +8.0% at S$2.55 in strong volume, top percentage gainer among STI stocks, as short-sellers rush to cover positions following developer''s confirmation of rights issue, say dealers "The stock is a short-term buy as people who short-sold previously based on recent speculation of a rights issue are now covering their positions since the exercise is now official," says local brokerage dealer. Stock down 35.9% from early January peak of S$3.68 after Dow Jones Newswires first reported company mulling rights issue. "We think this forces existing shareholders to take up the issue to ensure they are not diluted," says Macquarie; reckons most investors will give management "the benefit of the doubt" with regard to ability to ride through current difficult market conditions. Resistance eyed at 20-day moving average of around S$2.78.

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