Half-year report: Shares up 39%

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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.

Mr Shek Chee Seng, chief executive of Reliance
Asset Management Singapore, who spoke in his personal capacity, was more
cautious.

'I think the run-up since March has gone ahead of the
fundamentals. With the Singapore economy still showing signs of weakness, the
second-quarter earnings announcements may surprise on the downside.'

Some
analysts reckon the shares of the three local banks may be moving ahead of
their future earnings performance. At these levels, the shares are already
pricing in an earnings recovery scenario, as well as a likely reversal of some
of the paper losses on their investments.

'While earnings will be better
than what was expected at the start of this year, they remain below the
expectations back in mid-2008. A scale-back to the previous peak may have to
wait till next year,' said JPMorgan analyst Sunil Garg.

Experts believe
investors have largely priced in a second-half recovery. Instead, investors
will be looking for reassuring comments about the future which, if forthcoming,
will fuel further market gains.

'There could be some disappointments but,
a correction aside, I do not see a significant downside risk,' said Dr Marc
Faber, who told investors to bail out of US stocks before the 1987 Black Monday
crash. 'March lows are most unlikely to be broken and, within a year, stocks
could be up another 30 per cent.'

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