Singapore stocks advanced, sending the benchmark Straits Times Index to above the 3,000 level for the first time since 2008, after the government raised its economic-growth forecast for the second time this year.
 

DBS Group Holdings, Southeast Asia’s biggest lender, climbed 4.6%. City Developments, the second-biggest homebuilder in the city-state, gained 2.5%. Singapore Press Holdings, the biggest newspaper publisher, rose 1% after saying second-quarter profit increased.

“The government’s very bullish forecast suggests the rebound is quite strong,” said Chua Hak Bin, head of research at Citigroup Inc. in Singapore. “It’s encouraging that the recovery is fairly broad-based. This will translate to a strong earnings recovery, especially for banks.”

 

Singapore’s Straits Times Index increased 1.6% to 3,019.74 at the close, its highest close since June 18, 2008. Gross domestic product will grow by as much as 9% in 2010, the trade ministry said in a statement today, compared with a previous estimate of as much as 6.5%.

 

The city-state’s US$182 billion ($250 billion) economy expanded an annualized 32.1% in the first quarter from the previous three months, when it shrank 2.8%, the government agency said. That was better than the median estimate for 18.4% growth in a Bloomberg News survey of 11 economists.

 

The Singapore dollar rose the most in a year after the central bank said today it will undertake a one-time revaluation and seek a gradual and modest appreciation of the currency.

 

DBS Group gained 4.6% to $15.50, the biggest contributor to the benchmark index’s advance. United Overseas Bank, Singapore’s second-largest lender by market value, rose 4.7% to $20.88. Oversea-Chinese Banking Corp., owner of Singapore’s biggest life insurer, gained 2.4% to $9.16.

 

“We’ve just seen the realization that Singapore is a great place to do business. With the recovery around the world, Singapore is a very important part of people’s investment,” Donald Gimbel, senior managing director at Carret Asset Management LLC said in an interview on Bloomberg TV. “We will gradually be adding to our position,” in Singaporean stocks.

 

Among property developers, City Developments, the second- biggest homebuilder in the city-state, climbed 2.5% to $11.50. CapitaLand, Southeast Asia’s biggest developer, gained 2% to $4.18. Singapore’s private home prices rose 5.1% in the first quarter from the previous three months, a government report showed on April 1.

 

Fraser & Neave, the property developer and Singapore’s largest beverage maker, advanced 2.7% to $4.94. Deutsche Bank AG rated the stock a new “buy” with a 12-month share- price forecast of $6.

 

Singapore Press Holdings gained 1% to $3.97. The company said yesterday it had a profit of $113.3 million in the second quarter, up from $87 million a year earlier.

 

Neptune Orient Lines, the container carrier that gets about 64% of revenue from the Americas, advanced 8% to $2.30, its highest close since Aug. 18, 2008. The trade deficit in the U.S. widened in February more than anticipated as Americans snapped up foreign-made televisions and computers, government data released yesterday showed.

 

“NOL has a higher exposure in the trans-Pacific route. It stands to benefit more than other lines from improving U.S. trade,” Suvro Sarkar, an analyst at DBS Group Holdings, said.