STOCKS NEWS SINGAPORE-Shares rise by midday, DBS gains

Singapore shares rose by midday on Wednesday, after China's manufacturing sector showed fresh signs of bottoming out in April and strong U.S. factory activity data raised hopes that the global economy was still on track for a recovery.

The benchmark Straits Times Index (STI) rose 0.52 percent to 2,994.00, holding above key resistance at the 50-day moving average around 2,986.

"The markets have been holding up today. China's HSBC PMI came in slightly better than the last number we saw," said Ng Kian Teck, lead analyst at SIAS Research.

However, he said he expects the STI to remain rangebound ahead of U.S. non-farm payrolls data due on Friday.

Shares of DBS Group Holdings Ltd climbed as much as 1.5 percent to a five-week high, as investors warmed to the stock following its stronger-than-expected quarterly earnings last week.

Upcoming Indonesian rules that may jeopardise DBS Group's $7.3 billion bid to take over Bank Danamon also helped sentiment as it lessened the risk of DBS becoming bogged down in a drawn-out, messy acquisition and consolidation process.

DBS rose to an intraday high of S$14.17, a level not seen since the announcement of the Danamon deal last month caused the shares to plunge.

"The Danamon deal is still subjective. The market seems to be taking the probability that it may not go through in a positive way," said Ng.

U.S. factory activity grew in April at the strongest rate in 10 months, with the Institute for Supply Management's index rising to 54.8 from 53.4 in March, easing worries the economy had lost momentum at the start of the second quarter.

The HSBC China Purchasing Managers' Index, which is geared towards smaller firms, improved to 49.3 in April from 48.3 in March.

1303 (0403 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com; Editing by Chris Gallagher)

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11:57 STOCKS NEWS SINGAPORE-Sakari shares up as cost reductions expected

Shares in Sakari Resources Ltd gained on Wednesday as the Indonesian coal miner is expected to reduce costs at a key mine this year, shrugging off poor first quarter results.

Sakari stock rose 3 percent to S$2.03, bringing its gains so far this year to around 10 percent, with OCBC Investment Research maintaining its buy rating on the miner despite reducing its target price to S$2.29 from S$2.76.

Sakari's Jembayan mine in Kalimantan, Indonesia, had been hit by bad weather and management brought forward the opening of two new pits there, driving up cash costs to $67.5 per tonne in the first quarter.

But OCBC said in a report that Sakari believes operations at Jembayan are set to return to normal over the year.

"(Sakari) remains confident that it can achieve a cash cost of low- to mid-US$60/tonne this year," OCBC analysts wrote.

OCBC cut its 2012 earnings estimate for Sakari by 41 percent after the miner posted a net profit of $14.5 million for its first quarter, 65 percent lower than a year ago due to lower coal production and higher fuel costs.

1027 (0227 GMT)

(Reporting by Leonard How in Singapore; leonard.how@thomsonreuters.com)

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10:24 STOCKS NEWS SINGAPORE-OCBC Investment cuts CapitaLand target price

OCBC Investment Research has cut its target price for property developer CapitaLand Ltd to S$3.21 from S$3.40 and kept its buy rating, citing lower average selling prices for its residential developments.

CapitaLand shares fell 0.3 percent to S$2.93, but have gained 33 percent since the start of the year.

CapitaLand, Southeast Asia's largest property developer, on Monday reported a 31 percent climb in first-quarter net profit to S$133.2 million ($107.8 million), helped by higher operating income and larger portfolio gains.

Poor sales from its residential units in China continued to weigh on CapitaLand's overall sales in the first quarter, OCBC said. The company sold only 189 units in China in January-March.

However, broking house Maybank Kim Eng said in a report that CapitaLand may benefit from some policy loosening in tier 2 and 3 cities in China, and raised its target price to S$4.00 from S$3.96.

A loosening could help developers maintain strong contracted sales momentum into the middle of the year, and sales could recover strongly in May, said Kim Eng, which kept its buy rating.

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1011 (0211 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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09:55 STOCKS NEWS SINGAPORE-SMRT falls as brokers cut ratings

Shares of train operator SMRT Corp Ltd SMRT.SI fell as much as 3 percent to a 29-month low, after it posted a sharp fall in quarterly earnings and reduced its final dividend, prompting several brokers to cut their ratings on the stock.

SMRT reported on Monday a 59 percent drop in fourth quarter net profit to S$13.9 million ($11.2 million), and declared a reduced final dividend of 5.70 Singapore cents compared with 6.75 cents a year ago.

SMRT shares fell 1.8 percent to S$1.65 with more than 1.1 million shares changing hands in early trade, compared to its average daily volume of 3.2 million shares over the last five sessions.

CIMB Research cut its target price for SMRT to S$1.50 from S$1.55 and maintained its underperform rating, citing higher operating expenses and a cut in dividend.

"Plagued by margin erosion and cash flow strains, we see no reason to own this stock. Further, dividend yields are no longer attractive," said CIMB in a report.

The broker added that SMRT's plans for asset renewal will result in higher capital expenditure, while mandates for more stringent repairs and maintenance will elevate its cost structure permanently, eating into profits.

JPMorgan downgraded SMRT to neutral from overweight and cut its target price to S$1.60 from S$2.00.

OCBC Investment Research also downgraded SMRT to hold from buy and lowered its target price to S$1.71 from S$2.04, citing weaker-than-expected earnings for 2012.

It estimated that SMRT's capital expenditure in 2013 will rise to S$500 million due to higher expenses needed for upgrading its assets.

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0942 (0142 GMT)

(Reporting by Charmian Kok in Singapore; charmian.kok@thomsonreuters.com)

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8:44 STOCKS NEWS SINGAPORE-Index futures rise

Singapore index futures climbed 0.12 percent, indicating a positive start of the benchmark Straits Times Index .

Asian shares edged higher and the dollar recovered against the yen on Wednesday after strong U.S. factory activity data eased concerns about a loss of momentum in the world's biggest economy.