Singapore shares rose 0.4% on Thursday, tracking gains across Asian bourses and lifted by heavyweight Singapore Telecommunications (STEL.SI) after it said it would raise its dividend payout.

By the midday break, the Straits Times Index (STI) <.FTSTI> was up 12 points at 3,301.29. Total market volume was 1.05 billion shares.

“Valuations for Singapore stocks don’t look awfully expensive and there are a few things going for the market,” said Terence Wong, the co-head of research at DMG & Partners.

 

He said he expects the STI to extend its gains through the rest of the year, helped by expected capital inflows after the U.S. Federal Reserve announced a second round of quantitative easing measures.

 

“The markets are awash with liquidity and third quarter corporate results haven’t been too shabby, with a few clear outperformers.”

 

The STI is expected to trade in a 3,280-3,320 band in the afternoon, with limited upside for the rest of the day as it nears its year-high of 3,313.61 hit on Monday.

 

SingTel, Southeast Asia’s largest telecoms firm, rose 1.9% despite posting weaker-than-expected July-September earnings, as its plan to raise its dividend payout ratio lifted investor confidence.

 

By the lunchbreak, SingTel was trading at $3.31 with over 16.9 million shares changing hands.

 

However, the world’s largest listed palm oil firm, Wilmar International (WLIL.SI), underperformed the broader index, falling 3.2% after several brokerages downgraded their ratings on the firm due to its weak third quarter earnings.

 

Both OCBC Investment Research and Phillip Securities downgraded Wilmar to “hold” from “buy”, citing lower-than-expected third quarter earnings and weak margins.