Overseas Union Enterprise (O07.SG) is up 2.2% at $12.08, extending modest gains of past two sessions after sinking to two-month low of $11.48 last week following Singapore property group’s share placement exercise, says Dow Jones.

“Prospects for OUE’s flagship Mandarin Orchard hotel and the adjoining Mandarin Gallery mall are improving with the strong tourist arrivals and pick-up in retail sales,” says Kim Eng Securities analyst Tan Chin Poh.

He expects OUE to maximise rentals yields, asset values after it completes re-development of its prime office assets in 2011. While prospects sound, investor following remains low given small free float, despite controlling shareholder Golden Concord Asia now owning 79.35% stake vs 88.51% before last week’s placement to non-retail investors.

Orderbook quotes suggest price may face resistance at $12.22.