Singapore Stocks-Up on SingTel, SGX as Greece provides relief

Thu Jun 30, 2011 12:55am EDT

* Index rises 1.1 pct, but gains likely capped at 3,118 in afternoon

* Mewah climbs 2.8 pct after Credit Suisse starts at outperform

By Charmian Kok

SINGAPORE, June 30 (Reuters) - Singapore shares marched 1.1 percent higher at the midday on Thursday, extending gains for the third straight session as investors were piling up blue-chips such as Singapore Telecommunications as the quarter ended amid signs that Greece may avoid a debt default.

Big-capitalization stocks got a boost as institutional investors padded up positions in their holdings before closing their books at the end of the second quarter.

SingTel shares were 1.9 percent higher by the lunch break at S$3.15 with over 42.5 million shares traded. Singapore Exchange gained 2 percent.

By the midday break, the Straits Times Index (STI) was up 34.13 points at 3,113.87. The total value of shares traded in the morning session was S$1.4 billion, double that of S$503.5 million on Wednesday.

"The markets are getting a relief after the Greek austerity measures were approved," said Liu Jinshu, an analyst at SIAS Research. "Now that the event is over, the amount of uncertainty has subsided and people are more willing to enter the market and increase their exposure," .

Traders said the STI's gains are likely to be capped at 3,118 this afternoon.

"There are still risks we need to look at. Investors are turning their attention to other euro zone countries which could face debt problems and recently concerns have been raised about Italy," Liu said.

Greece approved the first of two austerity measures on Wednesday despite worsening street violence, in a vote vital to winning fresh international aid so it can pay its debts on time and stave off bankruptcy.

Palm oil firm Mewah International rose 2.8 percent to S$0.92 after Credit Suisse started coverage of the firm with an outperform rating, traders said.

At the midday, 5.8 million shares of Mewah were traded, about 1.8 times higher than its average daily volume so far this year.

Mewah's earnings are expected to be driven by capacity expansion for specialty fats and to benefit from selling more higher-margin consumer pack goods, Credit Suisse said in a report.

The brokerage, which has a target price of S$1.19 for the firm, said it forecasts Mewah's earnings to grow by an average of 13 percent a year over the next three years.

Logistics services firm CWT Ltd jumped 7.3 percent to S$1.33 after it said it would acquire Switzerland's MRI Trading for $94 million.

"We are positive on the acquisition as MRI's business activities are complementary to CWT's," said DMG in a report.

Water treatment firm Sound Global climbed 3 percent to S$0.66 on expectations that it will win more contracts in China as the country's demand for clean water rises, traders said.

"Its fundamentals still remain strong, with a healthy order book providing visibility into the next year," said a local trader. (Reporting by Charmian Kok; Editing by Saeed Azhar)

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