Anonymous_X: Half year report 2009: Singapore shares up 39%

Check out the list of 10 STI gainers & how much their market capitalisation had surged: here. The ten companies mentioned are Olam International, Jardine C&C, Golden Agri-Resources, Noble Group, Wilmar, CapitaLand, CapitaMall Trust, SembCorp Marine, Keppel Corp, Jardine Matheson.

Shares listed on the Singapore stock market ended the half-year 39 per cent higher than on Dec 31, bringing total market capitalisation at yesterday's close to $545 billion.

The dramatic gain in market capitalisation - up from $329 billion just six months ago - came on the back of the sighting of green shoots and the loosening of credit markets. Also, commodity prices have surged due to China's planned infrastructure spending and expectations that the United States' commodities demand may soon recover.

SingTel retains its crown at the top of the bourse, with a market capitalisation of $47.8 billion, after an 18 per cent increase over the last six months.

Market capitalisation is calculated by multiplying a company's share price by the number of its common shares.

SingTel was followed by agri-business group Wilmar Holdings at $32 billion and DBS Group Holdings at $26.9 billion.

Wilmar's market capitalisation had jumped a massive 80 per cent. Another commodities player, Noble Group, took the 19th position, increasing its market capitalisation by 83 per cent since Dec 31 to $6.17 billion.

The property sector also saw many counters bouncing back after taking a pummelling at the height of the bear run. Sharp gainers included Keppel Land, City Developments and Yanlord.

Experts have mixed views on when the market will bounce back to the $677 billion value it saw in June last year.

'I'm of the view that earnings expectations will start to improve as we push closer towards an economic recovery from later this year,' said Dr Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors.

'Commodity plays will probably be an outperformer over the years ahead, as China's industrialisation proceeds and supply remains constrained,' he said.

From Straits Times, "S'pore shares up 39%".

Update: Whether it's true that STI shall come out higher over the next year as the economy recovers will remain to be seen. Till then, be prepared of all the possibilities...

The Singapore stock market has exceeded market-watchers' expectations in the first half of 2009. The STI has shot up from a year-to-date low of just under 1,500 in early March to the current level of 2,333 – an improvement of 60 per cent.

This would be the sharpest rise in the region, partly because other markets did not fall as badly.

Wong Sui Jau, general manager, Fundsupermart.com, said: "By March 9, generally everything was oversold. People were very negative on the economy. There was basically no good news out there at all in March this year.

"Purely on things like bargain hunting, things started to look up. Then, we had the 'green shoots' theory coming out and some indicators that were giving hope to investors."

Daryl Liew, chief investment strategist, Providend, said: "At the beginning of the year, we were thinking that the markets will be kind of flat because the global economic outlook was really quite bad.

"But we were quite surprised with the rise in the markets – it's not just the STI that has gone up; it's a global phenomenon. All global markets bottomed out in March and all have risen, just to different degrees.

"I think the key driver in the initial part of the rally was the emergence of the 'green shoots' – something that Ben Bernanke first mentioned. That buoyed global markets. Linked to that, there was a change in investor psychology.

"Markets had fallen so much, I think a number of investors sitting on a lot of cash decided that they would just jump in because valuations had come down to decent levels."

The commodities sector has been leading the way. Many investors view such stocks as a way to benefit from a possible surge in commodity prices, which is typical during an economic recovery.

"Not only did the 'bulls' like commodities, the 'bears' liked it as well. Some bearish investors felt that all this printing by governments all around the world would cause the value of money to come down and value of real assets like commodities would move up," said Wong.

"Commodities is one area they like, so you had two groups of investors piling into commodities and that's what drove them up. Year-to-date the best performing counters are the commodities and energy related counters."

Other sectors that have also done well include financial services and property. On the other hand, sectors that lagged behind are the more defensive ones such as utilities and transport.

But the upcoming second quarter earnings season may dampen any enthusiasm in the market. Some think the markets may even retrace lows seen in March and some observers expect a correction of between 5 and 20 per cent across the region.

Liew said: "Effectively, when you look at the situation now, we think technical indicators seem to be predominant now, rather than fundamentals. That's because a lot of investors are not looking at it on a fundamental basis.

"It's not just the stock markets; property markets are also going crazy. People are jumping into markets because they're afraid of losing out. So I think that's something that got us a bit concerned.

"When earnings come out, we suspect companies will be struggling, incurring losses, and that doesn't really justify a rise in stock markets because PEs are going to look quite bad."

But he also felt that the correction would be cushioned by investors sitting on cash on the sidelines, waiting to get in. Other market-watchers added that the corrections may occur against the backdrop of an economic recovery, which will mitigate falls.

Wong said: "There are a lot of investors, fund managers that miss the first phase of this run-up. They didn't participate or came in late. I think any correction, even if it happens, will be met by further fund in-flows into the market.

"This will make such corrections relatively limited in terms of potential downside. Furthermore, they are occurring in the backdrop of economic recovery."

Overall, however, analysts agreed that the local bourse is bound to come out higher over the next year as the economy recovers.