Singapore shares closed 1.12 percent higher on Wednesday as investors took comfort from a fresh injection of funds into banks hit by a crisis in the US subprime mortgage sector, dealers said. They said some fund managers were also active as they tidied up their portfolios before the end of the year.
The main Straits Times Index was 38.68 points higher at 3,473.21 from Monday's close of 3,434.53. Markets in Singapore were closed on Tuesday for Christmas Day.
Volume totalled 1.28 billion shares worth one billion Singapore dollars (694 million US). There were 510 rising issues, 177 losers and 1,036 issues were flat. US financial institution Merrill Lynch was the latest to get a fresh capital injection from a sovereign wealth fund, Singapore's state-linked Temasek Holdings.
The move by Temasek to inject 4.4 billion US dollars into the US investment and brokerage firm, whose books have been ravaged by the subprime mess, was a sign of confidence in the sector, said dealers. "We had positive market leads," said Song Seng Wun, regional economist at CIMB-GK Research.
"These demonstrate to market participants that there are investors who believe in the underlying growth of these financial institutions despite the current trouble they are in," he said. Among banks, DBS Group gained 44 cents to 21.12 Singapore dollars, United Overseas Bank added eight cents to 19.86 and Oversea-Chinese Banking Corp put on three cents to 8.43.
Singapore Airlines eased six cents to 17.40, ST Engineering lost four cents to 3.75 and Singapore Telecommunications added six cents to 3.86. In the property sector, CapitaLand was 10 cents higher at 6.41, City Developments dropped 20 cents to 13.96 and Keppel Land was flat at 7.35.