TRADING was mostly weak yesterday, but a late burst of buying ahead of an anticipated rise on Wall Street limited the Straits Times Index's loss to 15.35 points at 2,781.86.

Earlier in the day, a Hong Kong-led sell-off had dragged the index to a low of 2,769 or a loss of about 28 points. But as traders all know, much of what happens to stocks here depend on expectations for the US market later in the day, a clue being how Europe opens.

Yesterday, this opening was firm across all the markets, leading to the suggestion that Wall Street was set to rise during its Thursday session.

Not surprisingly, given that the banks had led the STI higher this week, the banks pulled the index down yesterday. Property stocks, meanwhile, were flat or weaker.

In a Wednesday Singapore Residential report, UBS Investment Research (UBSIR) said that it thinks the government could continue to introduce anti-speculative measures to prevent a bubble inflating. It said that the government could raise the required cash downpayment for private property from 5 per cent to 10 per cent and/or boost land supply.

'We remain cautious that developers who purchase (recently released) land parcels could overpay, only to be faced with lower demand if more policy measures are released in 2010. These could include restrictions on home financing from the current 90 to 80 per cent,' UBSIR said.

JP Morgan and Credit Suisse released positive reports on the Singapore Exchange (SGX), possibly accounting for the stock's six-cent rise to $7.98.

JP Morgan discussed the week's hot topic - namely the valuation difference between dual-listed stocks in Hong Kong and on SGX, and the administrative difficulties involved in transferring scrip between the two exchanges that lead to a delay of around three weeks.

Referring to the case of China XLX, whose shares surged on SGX on Tuesday this week when they debuted at a higher price in Hong Kong, JP Morgan said that other SGX-listed companies may consider following China XLX's example. 'We do not anticipate a significant business impact on SGX, with higher velocity and share prices likely to offset the trading volume transferred to Hong Kong,' it said. 'We retain our positive stance on SGX.'

Credit Suisse (CS) upgraded SGX to 'outperform' in a Wednesday report, saying that healthy liquidity conditions should support the stock. 'We believe new CEO Magnus Bocker can provide SGX with much-needed new growth drivers, focusing on making it the Asian leader in market technology services and OTC clearing in the next three to five years, which could contribute more than 10 per cent of profit,' CS said. It set a $10.10 target based on 24 times estimated FY2011 earnings, justifying the figure of 24 as being in line with SGX's historic 40 per cent premium to Singapore market.

Olam International stood out yesterday with a 10-cent fall to $2.63. In a Dec 9 'sell' call on Olam, RBS Asia Securities said that it is concerned about the company's high dependence on export incentives, mainly from Africa, for the export of agricultural products, because these incentives are potentially uncollectible.

Estimating that the incentives formed 41 per cent of Olam's FY 2009 net profit, versus just 10 per cent in FY 2005, RBS said that even if they are collected, this may be at a discount to face value, which means that Olam's earnings may be lower than stated.

As a result, RBS has cut its discounted cash flow-based target price for Olam to $1.63 from $2.63, pointing out that the stock trades at almost twice the sector's price-earnings.