Singapore shares closed higher yesterday on a positive lead from Wall Street and a rally in China on speculation that more stimulus measures are in the works to prop up the sagging property market.
The Straits Times Index (STI) closed 0.47 per cent or 13.38 points up at 2,883.64.
Shanghai provided much of the spark after it closed up 2.3 per cent on talk that the Chinese authorities could make mortgage interest payments tax deductible.
Chinese brokerages and banks also rose.
The surge in developer stocks in China fuelled gains in Singapore- listed China-related plays such as CapitaLand, Global Logistics and Yanlord.
CapitaLand jumped 1.92 per cent or six cents to $3.18, with 16.2 million shares traded; Global Logistics gained 1.49 per cent or three cents to $2.05, with 23.5 million shares traded; Yanlord advanced 1.45 per cent or 1.5 cents to $1.05.
Meanwhile, broker RHB has upgraded the Singapore stock market to overweight from neutral. It expects the market to rebound modestly in the second half of next year.
"We think the credit cycle will be kick-started following the US Fed interest rate lift-off... In particular, we expect large-cap stocks to stage a progressive recovery following a rout since July," RHB head of Singapore research Ong Kian Lin said.
"Our bottom-up Straits Times Index target of 3,200 points represents an implied 13.3 times 2016 forecast earnings," he added.
He recommends that investors stay selective, with banks, transport, technology, plantations and utilities as preferred sectors. Residential property market prices could fall by 6 to 8 per cent, he said.
"We expect some cooling measures to be lifted in the second half next year, after property prices corrected 12-15 per cent from the peak," he added.
Penny plays remained the most actively traded. Alliance Minera rose 14.8 per cent or 1.9 cents to 14.7 cents, with 45.5 million shares traded, and Memstar Tech gained 8.3 per cent or 0.1 cent to 1.3 cents on trade of 27.7 million.
Loyz Energy slipped 1.43 per cent or 0.1 cent to 6.9 cents, with 27.5 million shares changing hands.
Sembcorp Marine slumped to its lowest level in more than six years after warning that it expects a net loss for the fourth quarter.
SembMarine fell 4.4 per cent or nine cents to $1.97, while Sembcorp Industries dipped 2.8 per cent or nine cents to $3.16.
SembMarine also disclosed that its unit PPL Shipyard has filed suit against Marco Polo Marine for breaching a contract for a jack-up rig. Marco Polo claimed there was no basis to PPL's suit.
DBS Group Research downgraded SembMarine to fully valued from hold. It noted there "may be more bad news to come - deferments, cancellations, asset deflation etc - in view of the prolonged oil crisis".