Singapore shares steady ahead of Fed decision

SINGAPORE (Reuters) - Singapore shares flatlined on Wednesday, as investors awaited the conclusion of a two-day meeting of the Federal Reserve that could spell out its plans on winding down monetary stimulus.

The benchmark Straits Times Index was little changed at 3,067.99 points by midday in thin trading volume, while MSCI's broadest index of Asia-Pacific shares outside Japan firmed up half a per cent.

Stocks in financial, telecommunications and utilities rose marginally while other sectors were lower.

Maybank Kim Eng remained upbeat on Singapore's banking stocks as interest rates are expected to rise, and said DBS Group Holdings was its top pick in the sector.

"We believe DBS is best positioned to take advantage of a rising interest rate environment, given its liquid balance sheet and strong deposit franchise with cheap funds accounting for 58.4 per cent of total deposits," Maybank analysts wrote in a note.

DBS shares inched down 0.3 per cent to $16.48, but were up more than 11 per cent so far this year, making it the second-best performer on the index after Thai Beverage, which rallied 27 per cent.

DBS's smaller rivals, United Overseas Bank and Oversea-Chinese Banking Corporation have both risen more than 1 per cent year-to-date, beating a 3 per cent drop in the index.