SMALL cap stocks came alive last week, lifting our portfolios by an average 9.1 per cent. This is the strongest climb since May and is more than twice the rate of increase registered by the Straits Times Index last week. The one year top losers' portfolio was the best performing portfolio last week, rising by a whopping 15.3 per cent. Its performance was boosted notably by the S-chips and resource plays. Among the significant contributors to the portfolio's gain were Ausgroup, Mirach Energy, China Oilfield Tech and Sinostar. The portfolio is also the best performing portfolio to date. As of last Friday, it has nearly doubled from the dummy capital of $150,000.

It is quite far ahead of the next best performer - the lowest forward price-earnings portfolio, which is 69 per cent above its dummy capital.

On average, our portfolios are in the money by some 58 per cent.

For this week, Singapore shares are expected to extend their gains on hopes of economic recovery, but profit-taking could pare down gains, Dow Jones Newswires reported. There have been increasing signs that a rebound is firming up, buoyed by improvements in the trade-reliant economy's main markets such as the United States.

In the latest sign that the economy was emerging from a deep recession, Singapore's manufacturing output rose 12.4 per cent year-on-year last month, its fastest pace in over 12 months.

It was a sharp improvement on the 9 per cent drop recorded in June and far exceeded analysts' forecasts of an average decline of one per cent.

The decline in tourism numbers also appeared to be slowing down, with visitor arrivals last month dropping an annualised 4.5 per cent, its smallest decline so far this year.

The blue chip STI closed at 2,642.80 on Friday, up 97.94 points or 3.85 per cent from the previous week.

Average daily volume was 3.13 billion shares worth $1.8 billion, compared with 2.4 billion shares valued at $1.66 billion last week.

As for our portfolios, the purpose is to provide real-time tracking of the various trading strategies - namely, buying the stocks which are the most recommended by analysts, those which have seen the highest upgrades by analysts, the one-year top losers, the highest dividend yielding stocks, stocks with the lowest forward price-earnings ratio and those with the lowest price-to-book ratio.

The process is mechanical and no qualitative judgement is exercised. So stocks that appear in the portfolios are not necessarily good buys.