Spore market

Spore market: STI could open higher after some positive U.S. data lifted Wall Street Thursday, while regional markets are opening in positive territory.
Positive musings on yday’s Italy bond and bill auctions may also lift sentiment. While the bond sales fell short of target, the EUR 9b of bills were sold at 3.251%, about half the rate of the previous sale last month.

However, any hefty moves are unlikely on the last trading day of 2011 and the market is likely to remain very quiet. Thursday, the STI closed up 0.2% at 2672.78 and as it stands the index is down 16.2% for the year.

Looking ahead, DMG says it expects market weakness to remain in 1H12 "due to the persistent Eurozone debt problems, but a recovery could bring the STI to 3022 on a 12-month horizon." Its target works out to 1.31X P/B, lower than the 15-year historical average of 1.65X, "a level we feel is justified given the global uncertainties." The house recommends staying defensive; it says land transport stocks offer stable earnings, telecommunication have limited downside and it is bullish on the hospitality space.

Keppel may be in focus after it gets new orders worth $150m, taking total 2011 jobs to a record $10b.