Market Summary 13 Oct 2012

Singapore shares ended higher, tracking gains in some regional markets while the central bank's decision to keep its currency policy unchanged assured investors about the Singapore dollar's safe-haven status. However, traders and analysts said market participants could turn cautious in the coming weeks as the third-quarter earnings season kicks in.

The benchmark 30-component STI ended 0.3%, or 9.09 points, higher at 3041.75 points, with a total of 1.44 billion shares changing hands, up from 1.24 billion Thursday. The index ended 2.1% lower on the week.

"Capital flows into the Singapore dollar may continue as the SGD remains one of the safe-haven currencies in this world amidst the current uncertainties," UOB Economic-Treasury Research said in a note.

Earlier in the day, the Monetary Authority of Singapore unexpectedly kept its monetary policy unchanged and said it will continue to guide the local currency on its current appreciation path, as inflation concerns trumped a contraction in the economy in the third quarter.

Phillip Securities in a note said any gains in the Singapore stock market would be limited in the near term, adding that investors should take a "nimble" trading stance in the short term. "Over the next couple of weeks of corporate reporting season, forward earnings guidance as well as the economic outlook will prance to the forefront of investors' minds and dictate market direction," it said.

Shares were mostly mixed, with commodities stocks leading the gains. Wilmar International finished the day 3.6% higher at 3.17 Singapore dollars (US$2.58), as news that Malaysia is set to cut its export duty structure lifted investors' sentiment. "It's one of the better companies in terms of having feet in both Indonesia and Malaysia and (being) able to trade around any opportunities from" the potential tax change, an analyst said. Commodities companies Olam International gained 1.8% to S$1.95 and Golden Agri Resources rose 1.6% to S$0.645.

Fraser & Neave, which is currently the takeover target of Thai billionaire Charoen Sirivadhanabhakdi's TCC Assets, ended flat at S$8.89 after trading in positive territory for most of the day. Investors said they hope Mr. Charoen would raise his offer price of S$8.88 a share for the company.

Shares of DBS Group Holdings were up 0.3% at S$14.18, as the bank said after the market closed Thursday that it sold a 10.4% stake in Bank of the Philippines Islands to Ayala Corp. for US$616.4 million to boost capital before Basel III rules kick in next year.

The Singapore government's move last week to tighten the property market weighed on developers. CapitaLand was down 0.6% at S$3.16, while City Development lost 0.4% to S$11.52.

In the broader market, gainers dwarfed decliners 214 to 166.