Singapore shares rose with beverage and property conglomerate Fraser and Neave extending gains from the previous day in heavy trade due to interest in a takeover battle surrounding the stock.
F&N shares rose as much as 2.3% with more than 16 million shares changing hands, 7.7 times the average full-day volume over the past 30 days. It was the top traded stock by value and second-highest by volume in the Singapore market.
F&N and Japan’s Kirin Holdings have hired investment banks to advise them through the takeover battle for a prized Asian beer maker, adding to signs that a bidding war will intensify in the coming days.
The Straits Times Index was up 0.6%, while MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1%.
Other big-cap gainers include United Overseas Bank and Oversea-Chinese Banking Corp, which advanced around 1.5% each. DBS Group Holdings added 0.4%.
CIMB Research said Singapore banks trade at a price-to-book value of 1.12-1.28 times for 2012 and reflect low-growth prospects. "Current valuations are attractive, given muted risks from significant credit quality deterioration," it said, adding that it saw fair valuations at 1.3-1.35 times.
CIMB also said it sees Singapore banks as a useful gateway to fund intra-Asian trade and mergers and acquisitions. It raised its target price on DBS to $16.74 from $15.45, UOB to$21.13 from $20.17, and OCBC to $9.82 from $9.77.
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