Singapore shares finished at a 46-month high on Monday powered by gains in Singapore Telecommunications Ltd and technology stocks.
SingTel was up over two percent at S$2.41, its highest close since September 22, helped by the decision by Standard & Poor's to affirm its credit ratings and ratings of its Australian subsidiary Optus on Friday.
Technology stocks, such as Chartered Semiconductor Manufacturing, rose following a rally in US semiconductor-related stocks on Friday after J.P. Morgan raised its investment ratings.
Chartered Semiconductor rose close to six percent to S$1.10, its highest close since August 27.
The Straits Times Index was up 32.75 points, or 1.65 percent, at 2013.89 points, its highest since December 2000.
In the broader market, gainers outnumbered losers 276 to 108 in a heavy turnover of 785 million shares, against Friday's turnover of 698 million shares.
Despite gains of about 14 percent so far this year, dealers said many investors believe the Singapore market is still cheap compared to its historical valuations and could be re-rated as the new company earnings season kicks off later this week.
"Valuations remain at the lower end of the historic range," said Timothy Wong, head of research at DBS Vickers Securities.
He said one reason the market was viewed as cheap despite the recent gains was because of an upward revision to earnings estimates since the second quarter of 2003. "As such, we believe that there is still sufficient room for a re-rating in PE (price-to-earnings) multiples, as long as earnings track expectations," he said.
The first mainboard-listed firms to announce results on Friday are Singapore Exchange and the conglomerate ST Engineering
Neptune Orient Lines (NOL) fell over three percent to S$2.90, as dealers said players booked profits on its recent speculative run up.
NOL surprised analysts by jumping to a 10-year high of S$3.06 during the day on Thursday. Many analysts had expected the stock to fall a day after a take-over bid for the shipping firm by state investment agency Temasek Holdings Pte Ltd ended.
"There was a lot of speculation about restructuring of NOL but no news has followed so people are booking profits," said a dealer at a local brokerage.