Outlook for Neptune Orient Lines (N03.SG) has improved, with container shipping group expected to return to full-year profitability in 2010 (vs US$740.8 million ($995 million) FY09 loss) as risk of global double-dip recession now reduced, says OCBC Investment Research which has Buy call with $2.41 target.

OCBC notes, US economic data in August encouraging, with factory activity growing faster-than-forecast, payrolls declining less-than-expected, private hiring surprising on upside.

Penny stocks still most sought after in Singapore market, while blue chips generally thinly traded, according to Dow Jones.

FTSE ST Catalist Index +2.2% vs STI +0.1% at 3,014.86. Benchmark not expected to challenge year-to-date high of 3,043.

“At the moment, many investors can be likened to ‘headless chickens’ running about in a directionless environment and jumping into trades upon the slightest hearsay,” says CIMB analyst Jonathan Ng; “with interest shifting away from blue chips, we see a strong revival of interest in S-chips and penny stocks.”