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Tech stocks still flavour in Singapore market

SINGAPORE: Singapore's share market is expected to continue a technical consolidation this week, but technology stocks are poised to extend their gains on investors' euphoria over Internet stocks.

"The focus will be on tech stocks. It's not just in Singapore, but everywhere in the world," said Seah Hiang Hong, research head of Kim Eng Securities.

Marco Wong, chief investment officer of SG Asset Management, shared the same view, saying: "This will continue."

For the past few weeks, while most stocks came under pressure as regional fund managers shifted their funds to Malaysia ahead of its inclusion in the benchmark Morgan Stanley Capital International index, electronics issues were not only untouched, they outperformed everything.

Singapore's electronics sector index hit a record high of 247.33 last Friday before ending the week at 242.72, up six percent on the week, compared with a percentage point dip in the Straits Times Index to 2,096.24.

For the year, the STI has lost 15 percent while the electronics sector gained 31 percent.

Analysts and fund managers varied little in their picks of the sector, which included semiconductor firms like Chartered Semiconductor and contract manufacturers like Venture Manufacturing and NatSteel Electronics.

Eddy Kong of Standard & Poor's MMS said he expected the consolidative phase to continue.

Kong, putting his key support level at 2,020 and resistance at 2,145, said only a break of 2,175 could reverse the trend.

For many, banks were the favoured sector after electronics, while people continued to shun the once-thriving conglomerates and property sector.

"All the money is stuck in tech stocks. There is no money for people to buy investment properties. People can make 30-40 percent return in tech stocks, why bother about investment in properties," said Seah of Kim Eng.

On conglomerates, Wong said: "They are out of favour."

Analysts and fund managers were also little impressed with Keppel Corp's effort to increase shareholders value as the group bought back 10 million of its own shares.

Wong said he was keeping the underweight position on Singapore Telecommunications, which has lost 20 percent of its value for the year, particularly on concerns over competition from StarHub, a new telecom company.

StarHub would break SingTel's monopoly in fixed line phone services when it opens for business in April 2000 and also become the country's third mobile phone operator.-Reuters