Singapore shares lack mojo but find some hope in PM Lee's address

SINGAPORE shares ended a tad firmer, but upside was capped by analysts' warnings that the high market valuations inspired by the technology rally in the US may lead to profit-taking.

Investors were mostly sidelined ahead of the US Fed's publication of its Beige Book report on the state of the economic health of the nation on Wednesday.

"We ask ourselves the same question over and over - how extended are valuations?" David Kotok, chief investment officer at Cumberland Advisors Inc, said on Bloomberg TV. "Then we see reports on earnings, and there are positive earnings surprises coming from the tech companies - and that would suggest if that momentum continues then in fact they are not yet overvalued."

In Singapore, Prime Minister Lee Hsien Loong's parliamentary address lent some support to the market, notably the real estate investment trusts (Reits). Mr Lee said despite the depressed economic climate, where some companies are consolidating and laying off workers, many investment projects want to come to Singapore because of its stable governance and transparent laws. These investments are in the areas of biomedical, IT, insurance & finance.

"His speech comes at a time when businesses are worried with corporate downsizing. The news gives some glimmer of hope when he said, 'Changi will thrive again. Singapore Airlines (SIA) will be a great way to fly once more'," said one broker.

The Straits Times Index closed at 2,539.94, up 1.39 points, or 0.05 per cent. About 1.66 billion securities, worth S$1.02 billion, changed hands.

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Mapletree Commercial Trust, Mapletree Industrial Trust, Keppel DC Reit, and Frasers Centrepoint Trust were among the Reits that saw their prices advance.

Technology stocks continued to firm along with the US tech stocks. Venture Corp closed at S$20.20, up 24 Singapore cents, or 1.20 per cent. AEM Holdings closed 10 Singapore cents up at S$4.18.