Singapore shares were higher at midday on Thursday, on their third day of gains, as investors continued picking up bargains after Wall Street's rally overnight.
Better-than-expected quarterly results from JP Morgan and other U.S. companies raised investor hopes that the corporate sector is recovering from the global credit crisis and drove the Dow Jones industrials more than 250 points higher on Wednesday.
Market volatility will persist over the next two weeks as trading will largely be results driven, said Carmen Lee, research head at OCBC Investment Research.
Singapore Exchange Ltd. and Singapore Press Holdings Ltd. kicked off the earnings reporting season in Singapore early this week.
'Despite the improved sentiment, investors are likely to remain slightly cautious,' said Goh Mou Lih, research head at Westcomb Securities, in a note. Investors will continue to await the results of major financial institutions to assess the extent of the damage done by the subprime crisis on their earnings.
Merrill Lynch (nyse: MER - news - people ) will announce its first-quarter results tonight while Citigroup (nyse: C - news - people ) is scheduled to report its earnings on Friday.
At midday, the benchmark Straits Times Index gained 59.54 points or 1.9 percent at 3,147.03.
Gainers beat decliners 381 to 164 with 1,035 stocks unchanged.
There were 789.3 million shares traded valued at S$986.4 million.
Rig builders gained as crude oil prices rose to a fresh record, which should boost investments in oil and gas exploration activities. Keppel Corp (other-otc: KPELY.PK - news - people ) led the market's charge, rising 6.2 percent to S$11.68 while SembCorp Marine jumped 4.8 percent to S$3.90.
Banking shares also advanced, with DBS Group up 1.7 percent at S$19.38, United Overseas Bank (other-otc: UOVEY.PK - news - people ) up 1.8 percent at S$20.56 and Oversea-Chinese Banking Corp rising 1.7 percent to S$8.51.
Property stocks were also higher. CapitaLand was up 4.4 percent at S$6.68, City Developments gained 4.3 percent to S$12.14 and Keppel Land added 2.8 percent to S$5.86.
DBS Vickers Securities has upgraded its rating on the Singapore property sector to 'overweight' from 'neutral,' saying that property companies' share prices reacted ahead of the anticipated decline in home prices.
'Value and buying opportunities are emerging as stocks approach trough valuations,' said Lock Mun Yee, analyst at DBS Vickers, in a note. Lock, however, said the sector is lacking positive catalysts over the next six months.
Among other blue chips, Singapore Telecom gained 0.5 percent to S$3.91, Singapore Airlines (other-otc: SGPJF.PK - news - people ) added 0.8 percent to S$15.38 and Singapore Exchange rose 2.9 percent to S$8.17.
Singapore-listed Straits Asia Resources Ltd. (SAR), an Indonesian coal producer, rose 4.8 percent to S$3.06 after its parent Australian Straits Resources Ltd. (SRL) proposed to spin off all its coal assets into an entirely separate operation.
SRL plans to undertake a distribution-in-specie of its 51 percent stake in SAR to its shareholders and sell its coal assets to the unit. SRL also floated the possibility of making a secondary listing in Australia for the coal company.
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