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Singapore share markets seen trapped

SINGAPORE: Singapore's share market is technically poised for a rebound but fund managers are lukewarm on the prospects of near-term gains, except for electronics-linked stocks.

"The market has been consolidating for some time. All the forced selling is probably over," said Goh Keat Jin, market strategist of Kim Eng Securities.

"There is no bad news. I don't see the market coming down much further in the coming weeks. Technically, there should be a rebound," said Goh, putting his target level at 2,160 to 2,170, with support seen at around 2,090 points.

But Sheree Tan of Morley Asset Management said the Singapore market is likely to consolidate further.

"It's not so much that people are shifting out now. It's just that no one had put in fresh money at this point," she said.

The Straits Times Index finished down one percent last week at 2,117.03, its fifth consecutive weekly fall.

For the year, its performance has also been dismal, down about 15 percent, on broad weakness in the market.

Comparatively, the Dow Jones Industrial average rallied 202.28 points, or 1.99 percent, to 10,367.20, its fifth straight gain. For the week, the 30-stock average rose 505 points.

Technology stocks surged, pushing the Nasdaq Composite Index over the 4,900 mark for the first time to a closing high, fuelled by strong gains in semiconductor and computer stocks.

The Nasdaq jumped 3.37 percent or 160.26 points, its third-largest point gain ever, to 4,914.77. For the week, the index rose 323 points.

Singapore's technology sector rose 6.3 percent for the week and 24 percent for the year.

"It looks like that is the one that everybody seems to focus on. You don't want to be like too far off the mark," said Tan.

But she warned against euphoria, pointing to Internet software company, MediaRing.com, which tumbled over 20 percent Friday on disappointment over its 1999 results.

The firm, one of last year's hottest Internet stocks, chalked up a S$26 million loss on S$2.5 million revenue.

"I don't know how long people are willing to wait," Tan said.

Her favourites remained blue chip electronic stocks such as Venture Manufacturing, NatSteel Electronics and Datacraft Asia.

"They are expensive, but, at least, their strategies are working and deliver good earnings," said Tan, giving special mention to Datacraft, which had lost over six percent last week and over 30 percent since its early January high.

Bank stocks are likely to be in focus as DBS Group, Southeast Asia's largest bank, will release its 1999 results on Monday.

Analysts, however, expected little surprise on the profit front, forecast between S$1.05 billion and S$1.10 billion for 1999, against the previous year's S$223 million.

On bank stocks, Tan said: "I don't think they are going anywhere. Loan growth isn't that great and interest rates tend to go up. It's more for weighting purposes."

"But there is no real need to be overweight," she added.

For many, property counters remained a sector to shun on the lack of momentum in the physical property market and on the back of a rising interest rate environment.-Reuters