Reits And Oil Stocks Soar

Source : TODAY, Wednesday, September 12, 2007

But STI’s trading volume still thin as investors remain cautious

WEAKNESS in Wall Street and a sharp fall in China shares failed to dent sentiment at the Singapore Exchange, with real estate investment trusts (Reits) and marine and oil-related stocks boosting the Straits Times Index (STI).

Trading volume remained thin, however, reflecting a still cautious stance amid a murky global economic outlook.

The STI closed up 1.5 per cent at 3,494.57, below a two-month high of 3,500. Winners outnumbered losers 465 to 311. Volume was thin at 2.8 billion shares, but was higher than Monday’s 2.4 billion shares.

Chinese share prices closed 4.51 per cent lower after data showed inflation had spiked in August, raising expectations of more interest rate hikes, dealers there said.

Investors are also awaiting next Tuesday’s meeting of the United States Federal Reserve as leading US economists foresee softening growth that will lead the Fed to cut interest rates.

Some investors believe Asia is well-placed to weather a slowdown.

“Markets here can withstand the rout better than the rest of the world (given) Asia’s contribution to the global economy,” DMG Partners dealing director Gabriel Yap said.

Singapore Reits soared during the day, following bullish reports on their prospects by UBS and Citigroup. UBS selected Capita-Mall Trust and CapitaCommercial Trust among its top picks. Citigroup upgraded Ascendas Reit to “Buy” from “Hold”, saying its valuation looked attractive.

Shares of CapitaMall Trust closed up 4.7 per cent at $3.60, while CapitaCommercial closed at $2.72, up 4.6 per cent. Ascendas Reit ended 3.6 per cent higher at $2.60.

Marine and oil-related stocks closed up on bargain hunting and growth prospects. KeppelCorp added 1.5 per cent to $13.20, while its smaller rival SembCorp Marine climbed 2.5 per cent to $4.54. Singapore Petroleum, a refiner and explorer, rose 3.3 per cent to $6.20.— AGENCIES