Index up 0.71 percent, limited upside seen in afternoon * GuocoLand off early high; dismisses reported REIT plans * CapitaLand up 2 pct on strong China sales By Eveline Danubrata

SINGAPORE, Dec 29 (Reuters) - Singapore shares rose at midday on Wednesday as investors, who were positive about the strength of the local economy, bought more stock before they close off their books at the end of the year. But the market may have little upside in the afternoon after gains in the first session, traders said. By the midday break, the Straits Times Index (STI) <.FTSTI> was up 22.52 points at 3,206.22. Total value of shares traded in the morning session was S$646.3 million, up from S$357.6 million on Tuesday.

"Some people may be looking to close off their books before the end of the year and make some last minute purchases," said David Cohen, an economist at Action Economics. "The Straits Times Index is supported by solid fundamentals in the Singapore economy. The outlook is 15 percent growth in 2010 followed by another healthy year in 2011," he added. Among the large-cap stocks, CapitaLand was up about 2 percent, extending gains from Tuesday when it said that one of its new Beijing residential project has seen brisk sales during the Christmas weekend. It said 60 percent of its Beijing condominium Beaufort phase two units were sold during the festive period. [ID:nSNZyMCh8] Shares of Singapore-listed developer GuocoLand rose as much as 2.7 percent after the Business Times reported it may float two real estate investment trusts with total assets of up to S$8 billion ($6.2 billion).

However, GuocoLand said in a filing to the Singapore Exchange that it currently had no plans to establish a REIT. At midday, GuocoLand shares were up 1.2 percent at S$2.58 on a volume of 153,000 shares. Shares of China New Town , which develops large-scale towns in China, rose as much as 3.9 percent after it said it had sold a residential land parcel at its Wuxi New Town for 382 million yuan ($58 million). At midday, China New Town shares were trading at S$0.135 on a volume of 16.7 million shares.