Share price performance (%)

1wk: 1.37

3mths:17.87

1mth:1.41

1yr:65.89

Merrill Lynch has raised its recommendation and set a target price of $64, based on a view that asset inflation has returned. Analysts David Cui and Hillman Wong are positive on the office sector, to which the property conglomerate has a large exposure, and forecast a 30 per cent increase in the value of Swire's properties over the next two years. Their estimate of net asset value has been raised to $44 per share from $32.

Merrill Lynch

HOLD MTR Corp

Closing price: $12.40

Target price: $12.34

Share price performance (%)

1wk: 0.81

3mths:20.38

1mth:1.19

1yr:48.5

The target price has been raised to $12.34 from $9.20 after upward revision of earnings estimates for this year and next by 69 per cent and 76 per cent respectively. The higher estimates reflect 'the sharply improved economic conditions and property market in Hong Kong' but future earnings are still expected to fall sharply from last year's record $4.45 billion, S&P said. The recommendation has been lifted to 'hold', but the share price is likely to be volatile in the next six months.

Standard & Poor's Equity Research

BUY Cathay Pacific Airways

Closing price: $16.20

Target price: 18.40

Share price performance (%)

1wk: 0.93

3mths:6.37

1mth:13.21

1yr:35.47

The rating was upgraded on its promising growth prospects driven by the recovering domestic and global economies. Analyst Gary Zhang said Cathay's turnover was highly correlated with the economy. 'As a new round of economic cycle begins, the airline's business will rebound robustly,' he said. He expected it to report tomorrow full-year net profit of $785 million last year, down from $3.9 billion in 2002.

Sun Hung Kai Research