UOB shares hit 2-1/2 wk high on positive results; Singapore index gains

SINGAPORE Sun Feb 16, 2014 11:43pm EST

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SINGAPORE Feb 17 (Reuters) - United Overseas Bank Ltd shares jumped to their highest in two-and-a-half weeks on Monday on positive quarterly results, while Singapore stocks extended gains from the previous week as the rest of Asia edged up on easing concerns about emerging-market rout.

Shares of UOB rose as much as 2.6 percent to S$20.42, their highest since Jan. 28 and heading for their biggest daily gain in seven months.

UOB, the smallest of Singapore's three banks by assets, posted an 11.1 percent rise in its fourth-quarter net profit, beating expectations, as strong loan growth boosted core interest income.

"We believe UOB's diverse ASEAN footprint can allow it to take intra-regional trade related lending," Barclays analysts said in a note. "While credit costs may normalise upwards as economic growth outlook moderates, we believe UOB's disciplined approach and relatively conservative growth vs peers in recent years will result in manageable asset quality."

Barclays has an "overweight" rating on UOB and a target price of S$23.60.

The three Singapore banks have posted positive earnings amid concerns that government and central bank curbs on property transactions and lending are set to slow growth in mortgages as well as lending to property firms.

The benchmark Straits Times Index was up 0.8 percent at 3,062.61 as of 0437 GMT, after rising 0.8 percent last week. MSCI's index of Asia-Pacific shares outside Japan was up 0.7 percent.

Hutchison Port Holdings Trust dropped as much as 5.2 percent to its near two-month low of $0.64, making it the worst performer on the index, after the company underwent ex-dividend.

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