Market up, but lethargic

business-times.asia1.com.sg By VEN SREENIVASAN

SINGAPORE - Keppel Corp was the star performer in an otherwise lethargic market today, as investors warily watched the latest twists and turns in the unfolding Iraq drama.

The stock of the marine conglomerate shot to $4.43 before closing a net 14 cents lower at $4.28 ¡Âú its highest level since mid-November 2002 ¡Âú as players focused on companies that promise stability, growth, value and yield amid increasing geopolitical and economic uncertainty.

Keppel Corp's stock has gained more than 10 per cent in the past three sessions.

The Straits Times Index kicked off this week on a bright note, hitting 1,291.75 before late profit-taking pared it to a close of 1,279.2 ¡Âú a net gain of 5.35 points.

But despite the positive top-line indicator, the broad market was less than effervescent.

Volume was modest, with about 333 million Singapore dollar-denominated units worth some $229 million changing hands as gainers led losers 129-82 and 348 counters closed unchanged or weren't traded.

Venture Corp, which once more has delivered in terms of earnings, was the top gainer, rising 50 cents to $13.90. Last week, the contract manufacturer delighted investors by posting a stronger-than-expected 35 jump in net earnings to $181 million on a 65 per cent rise in revenue to $2.4 billion.

Not surprisingly, Venture's proven ability to do well despite tough conditions has prompted a slew of ""out-perform'' calls on its stock, with fair value ranging from $16 to $18.

Other notable blue chip gainers today included Singapore Airlines, which added 15 cents to $9.60, and Creative Technology, which was up 20 cents to $11.20.

The stock of Neptune Orient Lines eked out a 1.5-cent gain to 90.5 cents after the company announced that it has won a seven-year contract worth US$220 million to transport fuel from Venezuela to Singapore. But the deal will not help NOL's earnings in the current financial year.

Among small caps, Citiraya was in the limelight.

The stock of the electronic components recycling specialist topped the actives list with almost 22 million units changing hands as it gained 3.5 cents to 54.5 cents on speculation that the strong gold price will boost the firm's bottom line. Gold is a by-product of Citiraya's recycling activity.

Surface Mount Technology (SMT) was also actively traded, following a visit by analysts to its China operation. The stock edged up a cent to 52.5 cents as some 3.7 million units changed hands.

Research house Kim Eng sounded an upbeat note on SMT after visiting the company's Dongguan plant. In an on-line report, the local broker said SMT is poised for strong growth: ""All factories remain fully utilised ¡Âú even the four newly added lines over the past six months,'' Kim Eng said. ""It appears that the group's production ramp is on track to make another record year.''

Going forward, geopolitical concerns are likely to continue to dictate sentiment and the direction of equity markets.

Indeed, rises in Japan, Hong Kong, Taiwan and Sydney today were largely seen as a reaction to a perceived fall in the risk of war in Iraq.

Baghdad's decision to dismantle its Al-samoud missiles, Turkey's refusal to host US ground troops for an invasion, calls by some Arab nations for Saddam Hussein to step down and strident opposition to US-led military action by France and other United Nations Security Council members are seen as key factors weighing against an attack on Iraq for the time being.

But all this could change come Friday, when UN Chief Weapons Inspector Hans Blix reports to the Security Council.

In the meantime, the market is expected to gyrate between hope and fear.

Analysts expect the ST index to remain largely range-bound between resistance at 1,280-1,290 and support at 1,260-1,270 as the focus remains largely on short-term situational plays.