Singapore shares end morning higher on Wall St gains

Singapore shares end morning higher on Wall St gains

	Published : Mon, 27 Aug 2007 06:37 By : Agencies Print this Story

SINGAPORE (Thomson Financial) - Singapore shares ended the morning session higher Monday after Wall Street advanced Friday on better-than-expected sales of new homes in the US last month.

At the break, the Straits Times Index was up 52.16 points or 1.6 percent at 3,421.61.

Gainers led losers 608 to 151, with 168 stocks unchanged.

Volume traded was 1.08 billion shares valued at 992 million Singapore dollars.

CIMB-GK Research said the new home sales and durable goods orders data for July suggest

that the US economy is not about to slip into a recession.

Most Asian markets were lower Friday after the head of Countrywide Financial, the biggest mortgage lender in the US, said the worsening subprime mortgage crisis may cause a recession there.

But investors will continue to watch closely economic data from the US, CIMB-GK said.

'Given that the subprime worries really only hit global financial markets in late July/August, the impact on the US real estate sector may only be seen with the release of macro data from August onwards,' CIMB-GK said.

'This week we are going to get several developments that may give investors the chance to gauge the state of the US economy,' it said, citing the July existing home sales data due later

Monday and the second-quarter GDP data on Thursday.

DBS Vickers Securities advises its clients to look for bargains.

'The indiscriminate selling due to the US subprime credit market troubles has ended. We maintain our view that the Straits Times Index has found a low at 2,962 and see any pullback as a buying opportunity,' DBS Vickers said.

DBS Group Holdings added 20 cents at 20.50 dollars even though Southeast Asia's biggest lender said its exposure to collateralized debt obligations (CDOs), which could be affected by the US subprime mortgage market, is 2.4 billion dollars, nearly double its initial estimate of 1.3 billion dollars.

CIMB-GK said it is not overly concerned that DBS's CDO exposure is higher than initially thought because CDOs are particularly low-risk.

'The low-risk nature of these asset-backed commercial papers suggests that these were underwritten to generate fee income, rather than make incremental spreads. Hence, we believe that the new 1.1 billion dollars of contingent liabilities that DBS is tagged with is not a big concern,' it said.

Other banks also advanced, with United Overseas Bank up 40 cents at 21.00 dollars and Oversea-Chinese Banking Corp up five cents at 8.70 dollars.

Among blue chips, Singapore Telecommunications gained six cents at 3.70 dollars, Singapore Exchange was up 15 cents at 9.60 dollars, COSCO Singapore edged up 15 cents to 5.15 dollars and Keppel Corp up 30 cents at 12.90 dollars.

GuocoLand added 26 cents at 4.76 dollars after reporting that its net profit for the year ended June rose 81 percent to 281.9 million dollars, boosted by strong sales of residential property in Singapore and China and exceptional gains.

Property heavyweights were also higher, with CapitaLand up 20 cents at 7.55 dollars, City Developments up 40 cents at 15.40 dollars and Keppel Land up 10 cents at 8.10 dollars.

(1 US dollar = 1.51 Singapore dollars)

TFN.Singapore@thomson.com

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