TRADERS had nothing much to get out of bed for yesterday, with no new directions or temptations to inspire share buying.

Blue chips languished within a tight price range, with investors preferring to keep their powder dry as they awaited the release of third-quarter results from the big guns.

These include CapitaLand, which reports its results today, followed by OCBC Bank tomorrow and United Overseas Bank on Friday.

The lack of interest left the benchmark Straits Times Index (STI) up a mere 1.28 points at 2,716.62, after hitting a fresh intraday high for the year of 2,723.01 at the opening bell.

Sentiment was just as edgy in the broad market, with investors getting weary of the restructuring stories that have been circulating among penny stocks.

It sent daily market volume to a three-month low of 1.27 billion shares with turnover at $952.26 million - the first time it has slipped below $1 billion in more than three months.

Japanese bio-venture play Transcu was the most actively traded counter, falling one cent to 12 cents on a volume of 84 million shares.

Macquarie International Infrastructure Fund gained 4.5 cents to 41 cents, with 40.4 million shares traded, after agreeing to sell 71.6 per cent of its interest in a European infrastructural fund for $132 million.

The mood was just as lacklustre across the region. China's Shanghai Composite Index ended almost flat, while Taiwan's Taiex Index edged up 0.25 per cent. Hong Kong was closed for a public holiday.

But the tranquillity in the regional markets masks a growing debate over the seven-month market rally's sustainability.

Foreign broker CLSA said it is staying cautious about the Singapore market because of its 'rich valuations and lack of any substantial earnings upgrade potential'.

DBS Vickers expressed the view yesterday that 'a pull-back to either 2,600 or even 2,400 for the STI is possible before the major uptrend resumes'.

Citigroup's latest analysis of the fund inflow into the region probably explains why regional markets have turned so quiet recently. It noted that last week saw just US$781 million (S$1.1 billion) of new money from international investors flowing into offshore Asian equities funds.

'This made up only one-third of the inflows to global emerging market funds. It is 37 per cent less than the money flowing into global funds and even 10 per cent smaller than the amount taken in by Latin American funds whose assets under management are just one-fourth of Asian funds,' it added.

Foreign fund managers have been turned off Asian equities by the spate of big cash-calls by firms which have diluted their shareholdings in percentage terms and sucked liquidity out of the regional stock market.

'Over the last three months, total cash calls (IPOs and secondary issues like share placements and rights issues) reached US$54 billion in Asia ex-Japan. This is 3.6 times the funds raised in Latin America, emerging Europe, Middle East and South Africa added together,' Citigroup said.

engyeow@sph.com.sg