SINGAPORE market crept up to a new 14-month high during a listless and cautious session. And this happened on a day when other Asian bourses were buoyed by positive newsflows suggesting that a synchronised global economic recovery was very much intact and underway.

'This market has no backbone,' quipped one seasoned dealer. 'No one wants to take a position, and everyone is looking at everyone else for leads.'

After moving sidewards in range-bound fashion for much of the session, the benchmark Straits Times index settled to close at 2,808.18 points, a gain of 11.84 points. This is its highest close since early October 2008.

Meanwhile, Tokyo was up some 3.8 per cent on expectations that a weakening Japanese yen would boost exports, while Hong Kong's Hang Seng gained another 1.2 per cent on rising optimism about the economic outlook following positive noises from the US Federal Reserve.

Singapore has reason to celebrate, if it chose to. The latest November PMI rose 1.8 points to 52.0 on higher production, orders, inventory and employment. Analysts said that the pick-up in orders and other improving leading indicators suggest firmer production and exports for Singapore in the coming months.

Recently-listed CapitaMalls Asia was among the most actively traded gainers amid reports that it will soon be a component of the MSCI Singapore index next week. The stock ended the day 14 cents higher at $2.50.

Meanwhile, its parent CapitaLand edged up two cents to $4.11 on expectations that it could pay out a special dividend of around 12 cents per share from the $883 million it raked in from the listing of its new Reit.

New kid on the block Hiap Tong made a disappointing debut, closing at its IPO price of 26 cents with some 19.4 million units changing hands. The Singapore-owned provider of hydraulic lifting and hauling services sold 38 million shares in its initial public offering, which raised $9.9 million.

This is despite the fact that the company's valuation is more attractive than its listed peers; its boasts a strong balance sheet and has a notable client base which includes SembCorp Marine, Keppel, Rotary Engineering, Takada and Sankyu.

Despite the uninspiring session, most research houses see the Singapore market cracking through the key 3,000 points level by early next year.

DBS-Vickers is maintaining STI's upside to 3,040, based on 16x FY2010 PE, while support is at 2,760, 14.5x PE.

Citi's Chua Hak Bin sees the opening of the two integrated resorts (Marina Bay Sands and Resorts World), February budget (reflecting outcome of Economic Strategies Committees) and possible early elections as key catalysts for the market. 'But the STI rally may stall as the Great Exit (from mid-2010) begins, as monetary tightening starts, fiscal stimulus fades and inventory restocking completes,' he added.

UBS, in its 2010 Strategy Report, said that it expected the cyclical recovery to continue through 2010, providing additional support for the equity market. 'But just as the investment landscape looks better than it did 12 months ago, challenges remain. To that end, 2010 will likely mark a year of transition where the strength of the recovery is tested by structural headwinds.'

These include the impact of government 'exit strategies', where the Fed and other central banks begin a process of stimulus removal and interest rate normalisation. Other concerns include high unemployment, further deleveraging and balance sheet repair, increased regulation, and funding of large fiscal deficits.