Singapore stocks rebounded from an early dip to end above the key 2,000-point level on Friday, led by Singapore Press Holdings (SPH) after the firm struck a deal with a rival to stem losses at its TV unit.
The Straits Times Index finished up 6.44 points, or 0.32 percent, at 2,003.56. It dipped to 1,990.03 near midday.
In the broader market, gainers led losers 185 to 159 in brisk turnover of 696 million shares.
SPH rose 8.1 percent to S$4.78, its highest since April 2002, after it said it will merge its TV operations with MediaCorp in a new company. SPH has accumulated losses of some S$180 million since its two free-to-air TV channels were launched in 2000.
"The bottom-line is the losses will now be reduced," said Steven Lim, fund manager at Daiwa SB Investments Singapore, which owns SPH shares.
SPH has accumulated broadcasting losses of some S$180 million since its two free-to-air channels were launched in 2000.
Timothy Wong, head of research at DBS Vickers, said the SPH-MediaCorp deal was an ongoing consolidation in Singapore aimed at limiting competition in businesses that feed on a domestic market of just four million people.
He said the financial sector had already had its share of consolidation with OCBC Bank's acquisition of a major stake in insurer Great Eastern this year and a round of take-overs of smaller banks by their larger peers in 2001. Yang Sy Jian, research head at UOB Kay Hian, said similar consolidation could help property firms boost their profits.
"Because of the small size of the Singapore market, companies that have a purely domestic base would continue to look for such M&A (merger and acquisition) opportunities," Yang said.
Property giant City Developments was among the top gainers, rising over 1.5 percent to S$6.7, defying recent downgrades of the sector by analysts. Conglomerate Keppel Corp, that apart from ship building and engineering businesses has a fair bit of exposure to property development, was also up over two percent to S$7.45.
Keppel Corp announced on late Thursday it had won three contracts worth S$51 million to provide waste-to-energy incineration services in China.
With oil prices regaining ground, Singapore Airlines fell 0.9 percent to S$11.50. Oil accounts for a fifth of the airline's costs.
GK Goh Research Pte Ltd downgraded the airline to "hold" from "buy", citing the impact of high fuel prices on the firm's bottom line.