The Wall Street rally, triggered by the Trump election victory on Nov 8, has also energised the local market, sending some benchmark counters to near 12-month highs.

The top performers range from banking stocks such as DBS Group Holdings and United Overseas Bank (UOB) to gaming play Genting Singapore and palm oil counters like Golden Agri-Resources and Wilmar International.

Expectations of a United States interest rate hike and the resilience of commodity prices have been governing investors' share buying while a general excitement continues to build over the tax cuts and fiscal stimulus that US President-elect Donald Trump may roll out after his inauguration in January.

But analysts warn that the rally may run out of steam, with some expecting a cool-off before the end of the year.

PALM OIL

So far the party is raging. Golden Agri-Resources has surged 14.5 per cent since Nov 8 to 43.5 cents at Friday's close, matching its 12-month high, while Wilmar International has gained 8.5 per cent to $3.59 over the same period, to its highest in seven months.

The duo looked a good bet for investors who noticed that the Bursa Malaysia palm oil futures - one of the commodity's key benchmarks - has hit its highest since 2012. This followed the strong quarterly earnings growth reported by both companies in recent weeks.

Lagging effects from the weather impact on plantations last year mean that production will not see a major recovery until the second half of next year, which will bolster palm oil prices.

"Another factor to consider is the surging prices of iron ore. This sends the positive message that Chinese demand for commodities is generally improving," said KGI Fraser Securities Singapore strategist Nicholas Teo.

BANKING

DBS shares have added 11.2 per cent since Nov 8, closing at a 12-month high of $17.05 on Friday. UOB has added 7.2 per cent to $19.88 while OCBC has increased 4.3 per cent to $8.89, the highest since July.

The market interest reflects the all-but-certain December rate hike in the US, which means better margins for local banks, Maybank Kim Eng analyst Ng Li Hiang noted.

"That's why we're seeing Sibor and SOR rising over the past two weeks. This should translate to stable net interest margins for the banks," she added, referring to the margin between interest charged and paid by a bank, which is a key gauge of its profitability.

The three-month Singapore interbank offered rate (Sibor) was stuck around 0.87 per cent between July and early November, but the recent surge has pushed it to around 0.925 per cent.

GAMING

Genting Singapore has also been a favourite market pick amid the Trump rally, rising 8.5 per cent to 95.5 cents at Friday's close, just below the 12-month high of 98.5 cents.

Earlier this month, the casino operator reported a net profit of $106.9 million for the three months to Sept 30, up from $37.2 million a year earlier.

"Profit growth, reduction in write-offs for bad debt; it seems they are finally able to rationalise the struggling VIP business. With Macau gaming stocks also on a run, it's no wonder Genting has stayed hot, especially since it was so underowned previously," Mr Teo said.

But the bullish performance now is not always a guarantee of the future. Investors should approach with attention to price levels after the recent gains. Genting Singapore, for instance, now comes with a price-to-earnings ratio of 115.

REALITY CHECK

Industry-specific challenges must also be considered. Maybank Kim Eng is negative on Singapore banks, for example, despite the potential margin improvement, with Ms Ng pointing to the currency impact of the strong US dollar and persistent asset quality issues.

"As more oil and gas firms run into trouble - Swissco being the latest - the banks will have to fork out more provisions for bad debt. They will be able to sustain the impact, but earnings will definitely be affected," she added.

More importantly, the Trump rally may not last much longer, Bank of Singapore chief economist Richard Jerram believes.

"To me, it's really just buying into a fantasy. There's no reason why people think one set of outcomes - such as tax cuts and banking deregulation - can happen under Trump, while another set - trade curbs and stagnant growth - will not come true," Mr Jerram said.

"As we near the year end, which is also a period for profit-taking, I expect markets to cool down over the next six weeks."