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Singapore bank, tech shares still tops

SINGAPORE: Singapore shares are expected to head higher as attention returns to hopes of strong corporate earnings, with banking and technology stocks the key targets on investors' minds.

But the market's upside will likely be tempered by lunar new year holidays which will reduce the number of players in the shortened trading week.

The market will be closed on Monday to extend weekend celebrations for the first Dragon Year in the new millennium.

The Straits Times Index ended 9.58 points higher in half-day trading on Friday at 2,258.91. For the week, it lost 1.14 percent or 26.0 points.

"Generally, the trend should be up. Electronics and banks remain the house favourites," said Seah Hiang Hong, research head at Kim Eng Securities.

Chew Boon Leong, associate research director at HSBC Securities, said: "I am not excited about other sectors except electronics and banking. The interest will still be in those stocks."

With recent volatility caused by U.S. interest rate uncertainty cast aside, investor attention has returned to how well companies perform as many more report their financial performance this month and next.

So far, the corporates have not disappointed.

Better than expected quarterly results by chip foundry Chartered Semiconductor Manufacturing, multimedia products maker Creative Technology and Singapore Computer Services bode well for technology stocks.

In the financial sector, Keppel TatLee Bank, the smallest of the city state's five domestic banks, was expected to release its 1999 results on Thursday.

The bank's results would serve as a guide for the sector after leaving behind the Asian financial crisis.

Analysts say KepBank is on target to post a record net profit, with a consensus forecast of S$235.3 million ($139 million) for the year to end-December, up from S$53 million in 1998.

KepBank's finance company arm, Keppel TatLee Finance, beat forecasts with a net profit of S$38.9 million for 1999, against S$4.11 million the year before.

The positive corporate news and the rebounding economy will help nudge up the Straits Times index in the medium term, analysts said.

"Singapore's growth history remains intact, inflationary risk is small while the external environment is improving," said Fraser-AMMB Research in a report on Thursday.

Many analysts favour Southeast Asia's biggest bank, DBS Bank, as a proxy to the regional economic rebound.

Others prefer Overseas Union Bank because of a much-anticipated merger with its bigger rival Oversea-Chinese Banking Corporation and OUB's organic earnings growth.

Chartered Semiconductor and Creative are favoured among big-capitalised tech stocks. The smaller tech firms like compact disc maker Eastgate Technology and computer maker GES International are also seen riding the electronics boom.-Reuters