CERTIFICATE of Entitlement (COE) prices rose across the board on Wednesady to hit six-month highs.

The COE premium for cars up to 1,600cc posted the biggest gain of 11.9 per cent, to close at $8,489. The premium for cars above 1,600cc, on the other hand, inched up by less than 1 per cent to reach $7,552.

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The Open COE, which can be used for any vehicle type but ends up mainly for cars, was 9.1 per cent higher at $8,501.

The COE premium for commercial vehicles rose by 7.4 per cent to $7,100, while that for motorcycles was 1.5 per cent higher at $902.

The increase followed a 24 per cent cut in COE supply from last month.

Dealers were divided on the reason for the price rises. Some said the strong performance of the stock market was a factor. Yesterday, the Straits Times Index ended higher for the sixth straight trading day.

But others disagreed, saying it was too soon for the market's surge to have had an impact on COE prices. In any case, a market rally would be felt more in the bigger car segment, not the bread-and-butter up-to-1,600cc market, which saw the biggest rise in COE prices.

Mr Mark Choong, chairman of Toyota distributor Borneo Motors, the biggest motor firm in Singapore, has another theory: 'Maybe it is because of the H1N1 virus scare. It's like when we had the Sars crisis in 2003 - people were coming in to buy cars to avoid taking public transport.' Motor traders observed that the main beneficiaries have been the budget brands, including the Korean cars.

On Wednesday, more than 5,300 bids were submitted. This worked out to 1.5 for every available COE - higher than the usual 1.2 to 1.4 bids-to-supply ratio.

The higher premiums are likely to lead to more expensive small cars. Already, Borneo Motors is raising prices of smaller models by $1,000. Other players are likely to follow suit.